This quarterly earnings news release should be read in conjunction with our Third 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, Oct. 24, 2013 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended September 30, 2013.  The consolidated net loss was $37.9 million compared to net income of $12.6 million for the same quarter in 2012. This resulted in earnings (loss) per common share of ($2.02) for the quarter compared to $0.46 in the same period last year.

For the first nine months of the year, net income is $14.3 million, which is a decrease of $129.2 million from the same period last year, resulting in earnings per common share of $0.11.

"The heavy rains and flooding in the Greater Toronto Area, which were the most costly natural disaster in Ontario's history, had a very significant impact on our financial results this quarter. The estimated net losses from July's catastrophic event were $47.9 million," said Kathy Bardswick, President and CEO of The Co-operators. "Despite the recent weather-related challenges we've faced, the organization's financial strength is solid. Our capital position remains strong, and we were pleased with the growth we achieved in the auto, home and commercial lines of business across the country."

Co-operators General's Third Quarter Financial Highlights

Third quarter review

DWP improvements are attributable to policy count growth in the auto, home and commercial lines of business as well as home portfolio rate and inflation adjustments. DWP in the third quarter has increased by 5.9% or $32.9 million to $594.3 million. NEP increased during the third quarter by 3.3% or $16.9 million compared to the same period last year. The increase in NEP is seen in all geographical regions.

The combined ratio, excluding the market yield adjustment (MYA) for the quarter, was 114.3% compared to 105.7% for the same period last year. Undiscounted net claims and adjustment expenses have increased by 14.0% from the third quarter 2012, bringing the loss ratio to 81.1%, excluding MYA. Results were negatively impacted by the heavy rains and flooding in Toronto, where before-tax losses net of reinsurance were $47.9 million, inclusive of reinsurance premiums to purchase coverage for another event in the impacted layer. The expense ratio increased 1.0 percentage point to 33.2%, compared to 32.2% for the same period in 2012 mainly as a result of one-time costs related to information technology initiatives.

Net investment income and gains decreased by $30.5 million versus the third quarter of 2012. This is attributable to realized and unrealized losses, mainly the result of increasing interest rates which decreased the value of our portfolio holdings.

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 and 89.1% rated A or higher. Our equity portfolio is 80.6% 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 234% at September 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 Third Quarter 2013 MD&A or our 2012 Annual Report.

SHAREHOLDER AND INVESTOR INFORMATION

About Co-operators General Insurance Company

With assets of more than $5.1 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