Co-operators General Insurance Company reports third quarter 2012 results
Oct 25, 2012
This quarterly earnings news release should be read in conjunction with our Third Quarter 2012 consolidated financial statements and Management's Discussion and Analysis (MD&A) as well as our 2011 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, 2012 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended September 30, 2012. Consolidated net income was $12.6 million compared to $6.2 million for the same quarter in 2011. This resulted in earnings per common share of $0.46 for the quarter compared to $0.14 in the same period last year.
For the first nine months of the year, net income is $143.5 million, which is an increase of $85.1 million from the same period last year, resulting in earnings per common share of $6.48.
"We are experiencing good client growth across the country as Direct Written premium has increased across all core lines of business and all regions. The positive impact of this client growth on Direct Written premiums has been offset somewhat by rate decreases being applied in some territories, " said Kathy Bardswick, President and CEO of The Co-operators. "The improved performance in our investment portfolio reflects the general rise in equity markets and helped to offset third quarter underwriting losses resulting from summer storm activity."
|CO-OPERATORS GENERAL'S THIRD QUARTER FINANCIAL HIGHLIGHTS|
|($ in millions, except for earings per share and ratios)|
|Key financial data|
|Direct written premium (DWP)2||561.4||546.8||1,587.9||1545.3|
|Net earned premium (NEP)2||511.9||494.9||1,498.7||1429.9|
|Key success indicators|
|Earnings per share||$0.46||$0.14||$6.48||$2.31|
|Annualized return on average equity||3.4%||1.9%||18.1%||8.2%|
|Combined ratio - excluding MYA2||105.7%||101.0%||95.5%||101.5%|
|Minimum Capital Test (MCT)1||269%||259%||269%||259%|
|1Balance sheet data and MCT results for 2011 are as at December 31|
|2Balances exclude L'Union Canadienne for all periods presented, refer to the Discontinued Operations section of the MD&A|
Third quarter review
DWP in the third quarter has increased by 2.7% or $14.6 million to $561.4 million compared to the same quarter last year. DWP improvements are attributable to growth in client count offset by rate adjustments in certain lines of business.
Net investment income and gains increased by $31.2 million versus the third quarter of 2011. This is attributable to more realized and unrealized gains and lower impairment losses over the same period last year.
The combined ratio, excluding the market yield adjustment (MYA) for the quarter was 105.7%, compared to 101.0% for the comparable period last year. Undiscounted net claims and adjustment expenses have increased by 11.6% from the third quarter 2011, bringing the loss ratio to 73.5%, excluding MYA for the third quarter. This is the outcome of more accident year claims and less favourable claims development, specifically in Ontario auto. The expense ratio has remained comparable at 32.2%, compared to 32.8% for the same period in 2011.
Our portfolio composition is conservative and is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 92.2% of our bonds rated A or higher. Our equity portfolio is 83.2% weighted to Canadian stocks.
On June 6, 2012, Co-operators General announced that it had entered into an agreement to sell its wholly owned subsidiary, L'Union Canadienne, a Quebec-based intermediated property and casualty insurer, for approximately $150.0 million to RSA Canada. The sale allows Co-operators General to focus on the growth of its direct distribution business in the Quebec market. The transaction closed on October 1, 2012. For further details on L'Union Canadienne, refer to our MD&A for the third quarter ended September 30, 2012.
The Company's capital position remains strong, as the Minimum Capital Test (MCT) for Co-operators General Insurance Company was 269% at September 30, 2012, well above the regulatory minimum requirement of 150%.
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 2012 MD&A or our 2011 Annual Report.
SHAREHOLDER AND INVESTOR INFORMATION
About Co-operators General Insurance Company
With assets of more than $5.4 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
For further information:
P. Bruce West
Executive Vice-President, Finance and Chief Financial Officer
Telephone: (519) 767-3036