This quarterly earnings news release should be read in conjunction with our first quarter 2018 unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2017 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars. 

GUELPH, ON, April 26, 2018 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended March 31, 2018. The consolidated net loss was $27.8 million compared to net income of $34.6 million for the same quarter in 2017. This resulted in an earnings (loss) per common share of ($1.35) for the quarter compared to $1.55 in the same period last year.

"We were challenged in our first quarter of 2018 as our net income deteriorated compared to the first quarter last year. This was in the face of large property losses, increasing auto claims costs and unfavourable investment returns," said Rob Wesseling, president and CEO of The Co-operators. "While these factors negatively impacted our results for the first quarter, we continue to achieve a solid rate of growth on the strength of our industry-leading client engagement. In the first quarter, net earned premium was up across all core product lines and in every region of the country."

CO-OPERATORS GENERAL'S FIRST QUARTER FINANCIAL HIGHLIGHTS

First quarter review

In the first quarter, DWP increased by 11.0% or $59.4 million to $599.7 million. DWP improvements were attributable to growth in policy and vehicle counts, most notably in the auto line of business, combined with higher average premiums. NEP increased during the first quarter by 8.0% or $48.8 million compared to the same period last year. The increase in NEP during the quarter is seen throughout all geographic regions and core product lines.

The combined ratio, excluding the market yield adjustment for the quarter, was 107.5% compared to 102.5% for the same period last year. We experienced a challenging first quarter with undiscounted net claims and adjustment expenses increasing by 18.4% from the first quarter of 2017, bringing the loss ratio to 74.5%. Claims costs increased compared to the same period of the prior year as a result of an increase in the severity of current accident year property claims primarily in the West, paired with more unfavourable claims development in the auto line of business.

Partially offsetting the deterioration in our loss ratio is the improvement in our expense ratio. A decrease in our expense ratio of 1.5 percentage points to 33.0% was driven by lower spend on advertising and information technology system initiatives compared to the same period in the prior year.  

Net investment income and gains decreased by $58.8 million versus the first quarter of 2017 driven by higher realized losses on fixed income securities from rising interest rates, and unrealized losses, versus gains in 2017, from a decline in the fair value of preferred shares.

The Company's investment portfolio is comprised of high quality and well diversified assets. The credit quality of the bond portfolio remains high with 83.2% rated A or higher and 95.8% considered investment grade. The equity portfolio is 80.6% weighted in Canadian stocks.

Capital

The Company's capital position remains strong, as the Minimum Capital Test for Co-operators General was 205% at March 31, 2018, 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 first quarter 2018 MD&A or our 2017 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, as well as investment products. The Co-operators is well known for its community involvement and commitment to sustainability, and is listed among the Best Employers in Canada by Aon Hewitt and Corporate Knights' Best 50 Corporate Citizens 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