CO-OPERATORS GENERAL INSURANCE COMPANY REPORTS 2021 FOURTH QUARTER AND YEAR END RESULTS
Feb 17, 2022
GUELPH, ON, Feb. 17, 2022 /CNW/ - Co-operators General Insurance Company (Co-operators General) today announced its consolidated financial results for the three months and year ended December 31, 2021.
For the fourth quarter, Co-operators General reported consolidated net income of $42.9 million, compared to $139.1 million for the same quarter in 2020. Earnings per common share was $1.42 for the fourth quarter, compared to $5.05 for the same period last year. Direct written premium was $1,031.8 million in the quarter, an increase of $43.7 million as compared to $988.1 million in the same quarter of 2020.
Net income for the year amounted to $512.4 million, compared to $290.4 million in 2020. This resulted in earnings per common share of $18.74 compared to $10.49 in the previous year. Direct written premium increased by 5.1% to $4,108.3 million, compared to $3,909.9 million in the prior year.
"Our ongoing efforts to improve underwriting profitability – coupled with positive investment performance and lower claims activity throughout the year – have led to strong financial results and further solidified our capital position," says Rob Wesseling, CEO of Co-operators. "While insured losses and community impacts of climate events in 2021 were significant, our financial strength enables us to continue innovating, investing in the resilience of our communities, and as always, meeting the evolving needs of our wide range of members and clients."
Co-operators General's Fourth Quarter Financial Highlights
(in millions of Canadian dollars except ROE, EPS and ratios)
Key financial data
Direct written premium (DWP)
Net earned premium (NEP)
Key success indicators
Underwriting income - excluding market yield adjustment (MYA)
Earnings per share (EPS)
Annualized return on equity (ROE)
Combined ratio - excluding MYA
Combined ratio - including MYA
Minimum Capital Test (MCT)
Fourth Quarter Review
Fourth quarter DWP increased by 4.4% or $43.7 million compared to the same quarter of 2020, while NEP increased 1.6% or $15.4 million over the same quarter. This DWP and NEP growth was attributable to higher average premiums combined with an increase in policies in force in the commercial and home lines of business.
Our combined ratio, excluding MYA, deteriorated 8.1 percentage points to 99.0% compared to 90.9% in the fourth quarter of 2020. This was primarily driven by an increase in our expense ratio, which deteriorated 5.1 percentage points to 38.2%, due to increases in operating costs from higher strategic initiative spend. Our fourth quarter loss ratio, excluding MYA, also deteriorated 3.0 percentage points to 60.8%, a result of higher major events, including a catastrophic flooding event in British Columbia.
Net investment income and gains for the fourth quarter was $44.5 million, a decrease of $63.7 million compared to the same quarter in the prior year. The decrease was primarily driven by unrealized preferred share losses and realized bond losses, which is in contrast to unrealized preferred share gains and realized bond gains in the same quarter of the prior year.
Our balance sheet, liquidity and capital positions remain strong and enable us to continue to serve and meet the needs of our clients while also supporting our strategic areas of focus. Our 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 83.6% rated A or higher. Our equity portfolio is 83.5% weighted to Canadian stocks.
DWP for the year increased by 5.1% to $4,108.3 million, compared to $3,909.9 million in 2020. The increase was driven by higher average premiums across all lines of business and geographical regions, particularly in the commercial and home lines of business.
NEP increased by $208.1 million or 5.8% to $3,790.2 million as a result of growth seen across all our geographic regions and all core lines of business.
Excluding the MYA, the combined ratio improved by 5.8 percentage points from 95.0% in 2020 to 89.2% in 2021. This was largely the result of premium growth coupled with lower claims activity in the commercial and auto lines of business, partially offset by higher claims activity in the home and farm lines of business. The expense ratio deteriorated by 2.3 percentage points, due to increased operating expenses from strategic initiative spend and higher staffing costs.
Net investment income and gains decreased by $51.1 million compared to the prior year as a result of realized losses on bonds due to rising interest rates, combined with lower realized gains on common shares, due to lower turnover compared to the prior year. These were partially offset by higher unrealized gains on preferred shares and lower impairment losses when compared to the prior year.
Co-operators General's capital position remains strong, as the Minimum Capital Test for Co-operators General was 239% at December 31, 2021, well above internal and regulatory minimum requirements. We continue to closely monitor capital levels in response to the changing economic environment as it relates to the COVID-19 pandemic.
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, including the impact of the COVID-19 pandemic on our investments, operations and claims negatively affecting the results of our operations and financial position. 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.
About Co-operators General Insurance Company
With assets of more than $9.0 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. Co-operators is well known for its community involvement and its commitment to sustainability. Co-operators is ranked as one of the Corporate Knights' Best 50 Corporate Citizens in Canada and is listed among the Best Employers in Canada by Kincentric (formerly AON). For more information, visit www.cooperators.ca.
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 Group Limited
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