This quarterly earnings news release should be read in conjunction with our third 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, Oct. 25, 2018 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended September 30, 2018. The consolidated net income was $12.9 million compared to a net loss of $7.4 million for the same quarter in 2017. This resulted in an earnings (loss) per common share of $0.48 for the quarter compared to ($0.40) in the same period last year.

"In the third quarter we experienced exceptional revenue growth driven by the CUMIS acquisition, strong client growth, excellent retention and targeted rate action," said Rob Wesseling, president and CEO of The Co-operators. "At the same time, extreme weather and increased claims frequency negatively impacted our underwriting results."

Third quarter review

On June 28, 2018, we closed the previously announced acquisition of CUMIS General Insurance Company (CUMIS General), which took effect on April 1, 2018. CUMIS General's results of operations and balance sheet are therefore included in our consolidated results from that date forward. CUMIS General was previously a subsidiary of a company under common control.

In the third quarter, DWP increased by 21.8% or $162.9 million to $909.1 million. The third quarter results of CUMIS General contributed 12.0% or $89.9 million to the overall increase. Excluding the impact of CUMIS General, DWP improved by 9.8% or $73.0 million. This increase was attributable to rate adjustments predominantly in Ontario and the West, combined with growth in vehicle and policy counts most notably in Ontario. NEP increased during the third quarter by 14.4% or $94.3 million compared to the same quarter last year. The third quarter results of CUMIS General contributed 5.6% or $36.5 million to the overall increase. Excluding the impact of CUMIS General, NEP grew by 8.8% or $57.8 million. The increase in NEP during the quarter is seen throughout all geographic regions and core product lines. The results of CUMIS General were also driven by the trends described above.

Our combined ratio, excluding the market yield adjustment for the quarter, was 104.1% compared to 108.9% for the same period last year. Undiscounted net claims and adjustment expenses have increased by 9.3% or $47.0 million from the third quarter of 2017; however, strong premium growth more than offset this increase, decreasing the loss ratio to 73.4%. Claims costs increased compared to the same period of the prior year as a result of the inclusion of CUMIS General's current quarter results, and an increase in the frequency of current accident year claims in all regions except the West and all lines of business except farm. The expense ratio decreased by 1.4 percentage points to 30.7% driven by NEP growth which outpaced increases in spend compared to the same period in the prior year.  

Net investment income and gains decreased by $2.3 million versus the third quarter of 2017 primarily due to a decrease in net investment gains. This was partly offset by higher investment income, which was $4.1 million higher given the rise in market interest rates.

Co-operators General's investment portfolio is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 96.4% of our portfolio considered investment grade and 85.4% rated A or higher. Our equity portfolio is 80.4% weighted in Canadian stocks.

Capital

Co-operators General's capital position remains strong, as the Minimum Capital Test for Co-operators General was 202% at September 30, 2018, well above 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 third quarter 2018 MD&A or our 2017 Annual Report.

SHAREHOLDER AND INVESTOR INFORMATION

About Co-operators General Insurance Company

With assets of more than $6.5 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