This quarterly earnings news release should be read in conjunction with our Second Quarter 2013 consolidated financial statements and Management's Discussion and Analysis (MD&A) as well as our 2012 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars. 

GUELPH, ON, July 25, 2013 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended June 30, 2013.  Consolidated net loss was $5.9 million compared to net income of $64.4 million for the same quarter in 2012. This resulted in earnings (loss) per common share of ($0.56) for the quarter compared to $2.91 in the same period last year.

For the first six months of the year, net income is $52.2 million, which is a decrease of $78.7 million from the same period last year, resulting in earnings per common share of $2.13.

"Our thoughts are with all those in southern Alberta and the Toronto area affected by the recent devastating flooding, and we're proud of the outstanding job our staff and advisors have done in helping them toward recovery," said Kathy Bardswick, president and CEO of The Co-operators. "Our financial results reflect the challenges we faced during the second quarter, most significantly the estimated $77 million loss resulting from the catastrophic events in Alberta.  Although our loss ratios deteriorated in all lines of business compared to the same period last year, the underlying strength of the company continues. We remain very well capitalized, and achieved net earned premium growth in all core lines of business during the quarter."

CO-OPERATORS GENERAL'S SECOND QUARTER FINANCIAL HIGHLIGHTS

Second quarter review

DWP in the second quarter increased by 4.3% or $25.1 million to $612.5 million. DWP improvements are attributable to home portfolio rate and inflation adjustments as well as policy and vehicle count growth, mainly in the auto and commercial lines of business. NEP increased during the second quarter by 1.5% or $7.6 million compared to the same period last year. The increase in NEP is seen in all of our core lines of business and across the country, except in the Western region.

The combined ratio, excluding the market yield adjustment (MYA) for the quarter, was 112.8% compared to 89.2% for the same period last year. Undiscounted net claims and adjustment expenses have increased by 44.2% from the second quarter 2012, bringing the loss ratio to 79.5%, excluding MYA. Results were negatively impacted by the devastating catastrophic events in Alberta, where before-tax losses net of reinsurance were approximately $77 million, inclusive of reinsurance reinstatement premiums. The expense ratio increased 0.1 percentage point to 33.3%, compared to 33.2% for the same period in 2012.

Net investment income and gains decreased by $15.4 million versus the second quarter of 2012. This is attributable to less realized gains, more unrealized losses and lower interest income, which offsets lower impairment losses recorded.

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 99.7% of our bonds considered investment grade, of which 89.5% are rated A or higher. Our equity portfolio is 80.9% weighted to Canadian stocks.

Capital

The Company's capital position remains strong, as the Minimum Capital Test (MCT) for Co-operators General Insurance Company was 243% at June 30, 2013, well above the regulatory minimum requirement of 150%.

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 Insurance Company. 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 2013 MD&A or our 2012 Annual Report.

SHAREHOLDER AND INVESTOR INFORMATION

About Co-operators General Insurance Company

With assets of more than $5.0 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 and the Class E Series D Preference Shares trade under ticker symbol CCS.PR.D. Both series of shares trade on the Toronto Stock Exchange (TSX). Further information can be found at www.cooperators.ca. 

SOURCE: The Co-operators