Co-operators General Insurance Co. today reported a reduced profit for the second quarter ended June 30.
Consolidated net income for the quarter was $40.6 million compared to $48.9 million for the same quarter in 2007. Earnings per common share were $1.88 for the second quarter compared to $2.29 for the same period last year.
“The company’s underwriting results were challenged by higher claims in both the home and auto lines, higher expenses related to strategic investments and earned premium that was lower than planned,” says Kathy Bardswick, president and CEO of Co-operators General. “However, strong equity and bond gains as well as the strategic divestment of real estate assets positively impacted our second quarter results.”
Gross written premium in the second quarter increased 2.7% to $614.9 million, compared to $598.6 million in the second quarter of 2007. Growth in personal automobile and home lines of business occurred primarily in Western Canada and Quebec through rate increases, insured value increases, strong client retention and the impact of two-year policies in Quebec. These were partly offset by price reductions in the commercial line of business due to the continuing soft market.
Net earned premium growth for the quarter was 4.2% above the previous year and was largely attributable to the automobile and home lines of business, predominately in Western Canada and Ontario.
Second quarter net investment income from interest, dividends and real estate rose to $34.1 million in 2008, up from $33.3 million in 2007. Net realized gains of $34.2 million were achieved in the quarter, up $28.5 million from the same quarter in 2007. Subsequent to the period ended June 30, 2008, the company has finalized two separate agreements to sell six of its office buildings in the real estate portfolio. It has entered into 15-year lease agreements for five of these office properties.
The loss ratio for the quarter was 70.0%, up from 61.8% during the comparable period last year due to less favourable claims development in Ontario auto and weather related events in Quebec and Ontario. This was partially offset by the impact of an increase in the discount rate used to discount claims liabilities. The combined ratio of claims and operating expenses for the quarter was 102.6%, compared to 92.5% for the second quarter of 2007.
During the quarter, Co-operators General repaid subordinated debt to its parent company totalling $30 million, and declared and paid a common share dividend of $60 million to its parent company. Dividends declared on preferred shares were $4.2 million, compared to $4.4 million in the same quarter last year.
Co-operators General reports lower Q2 income
- By: IE Staff
- August 5, 2008 August 5, 2008
- 11:20