Desjardins Financial Security (DFS) today reported an 18% increase in net income for the fourth quarter ended Dec. 31, 2007.

Net income for the quarter was $50.4 million, up from $42.7 million in the year-earlier period.

Insurance premium income for fourth quarter totalled $611.2 million, up 12.9% from a year ago.

For the full year, the life and health insurer reported net income of $216.7 million, crossing the $200 million mark for the first time. That represents a $65.4 million or 43.2% increase over 2006, when net income totalled $151.3 million. Operating income amounted to $288.3 million for a 42.2% increase.

Business growth across the country, coupled with investment performance and improved productivity, was one of the key factors behind the company’s success in 2007, DFS said.

Insurance and annuity premium income increased 5.6% to stand at $2.6 billion for the year. Insurance sales rose 14% to total $415.7 million. Assets under management and administration stood at $22.6 billion compared to $19.9 billion at the end of 2006, representing a 13.2% increase.

DFS said profitability in 2007 was affected by the subprime mortgage credit crisis worldwide, which led to liquidity problems on the non-bank-sponsored asset-backed commercial paper (ABCP) market. At Dec. 31, 2007, DFS had ABCP holdings of $161.2 million after recognition of a $34.2 million decrease in value. This depreciation reduced the company’s net income for 2007 by $17.8 million.

The portion of the company’s net income attributable to the shareholder totalled $211.1 million in 2007, for an increase of $65.3 million over 2006. Return on shareholder equity was 27.5%.

Group and business insurance sales and administered premiums passed the $235 million and $2 billion mark respectively, in 2007. Overall sales have grown significantly, from $195.6 million in 2006 to $237.3 million in 2007.

In 2007, individual insurance sales grew by $3.5 million to total $41.9 million. Premiums stood at $392.6 million, up $18.4 million from 2006.

Sales in the savings sector totalled $1.1 billion, an improvement of $48.2 million over 2006.