Co-operators General Insurance Co. today reported third quarter revenue growth of 5.3% over the same period last year, but rising average claims costs caused profit to dip slightly.

For the three months ended Sept. 30, 2008, the property and casualty insurer’s consolidated net income was $29.3 million, down from $30.3 million for the same quarter in 2007. Earnings per common share were $1.40 for the third quarter compared to $1.44 for the same period last year.

“Rising average claims costs have negatively impacted the company’s results this quarter and, in particular, recent regulatory action in Alberta related to minor injury liability caps has increased Facility Association auto reserves,” said Kathy Bardswick, president and CEO of The Co-operators in a statement.

“However, our net income for the third quarter is comparable to the same period last year. Revenue is up 5.3% and growth was achieved in all lines of business, across all regions of the country.”

Bardswick added that the company’s capital position remains strong, and it has not been directly affected by the liquidity and credit events in the United States.

“We had no direct holdings in the companies most notably impacted by the various U.S. liquidity and credit events that took place,” the company said in the release. It added that the company has an “immaterial” amount of non-bank asset-backed commercial paper.

The Co-operators’ gross written premium rose 3% to $589.3 million in the third quarter, from $571.9 million in the third quarter of 2007. The growth reflected rate and inflation increases, strong client retention and renewals on two-year policies in Quebec, but was partly offset by price reductions in the commercial line of business due to a soft market, the company said.

Third quarter net investment income from interest, dividends and real estate rose to $36.1 million in 2008, up from $33.8 million in 2007. The company achieved net realized gains of $16.3 million, up $11.3 million from the same quarter in 2007, after it took advantage of market volatility to crystallize gains and continued to divest its real estate holdings.

For the first nine months of the year, the company’s net income is $80.4 million, down from $87.4 million in the same period of 2007.

IE