Desjardins reports 3.8-point improvement in loss ratio, auto premium increase due to usage-based insurance

Desjardins General Insurance Group Inc. released Thursday some of its financial results for 2013, reporting direct written premiums of $2.1 billion, up 6.7% from $1.98 billion in 2012. 

“The combined ratio improved by 2.9 percentage points to 91.7%, compared to 94.6% in 2012,” Levis, Quebec-based DGIG stated in a press release. “This was largely due to the 3.8 percentage point improvement in loss ratio.”

DGIG’s parent company, Desjardins Group, has not published its annual report for 2013 yet. But DGIG did report some financial data in its March 13 press release. DGIG reported net income, in the fourth quarter of 2013, of $81.8 million, up 35.2% from the same period in 2012.

“In addition, direct written premiums increased by 8.1% from the corresponding quarter in 2012 due to increased marketing activity and the impact of the Ajusto and Intelauto usage based insurance programs,” DGIG stated.

Desjardins announced its Ajusto auto product last May. It uses telematics technology from iMetrik Solutions and can be used mainly on vehicles made in or after 1998, with limited exceptions. The iMetrik device plugs into the vehicle’s diagnostic port and it collects data such as distance travelled, hard braking and acceleration and the time of day the vehicle is driven.

DGIG reported last November that about 38,000 customers had enrolled in its Ajusto and Intelauto usage-based auto insurance programs.

In Ontario, Alberta and Quebec, DGIG provides auto, property, pet, motorcycle and recreational vehicle coverage. In Quebec, DGIG also provides business insurance, including auto, property, equipment breakdown, loss of business income and liability. As of the third quarter of 2013, when it last released complete financial results, DGIG had 3,700 employees across Canada, with more than 2.1 million policies in force.

Desjardins Group also owns High River, Alta.-based Western Financial Group Inc., which in turn owns a broker network in British Columbia, Alberta, Saskatchewan and Manitoba. Western also operates Western Direct Insurance, a pet insurance carrier (Western Financial Insurance Company) and Western Life (originally the Canadian arm of Federated Mutual).

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— Ajusto Program (@AjustoProgram) March 6, 2014

On Jan. 14, Desjardins announced it had entered into a definitive agreement to acquire State Farm Canada’s property and casualty business. That transaction, which is expected to close in 2015, would also include State Farm’s life insurance, mutual fund, loan and living benefits operations in Canada. Desjardins plans to continue operating those operations under the State Farm brand. Desjardins announced at the time that French financial services provider Credit Mutuel plans to invest $200 million in Desjardins while State Farm would invest $450 million in non-voting preferred shares.

“Once completed, this transaction between three major cooperative and mutual organizations will almost double DGIG’s premium volume across the country,” stated Sylvie Paquette, DGIG’s president and chief operating officer, in the press release March 13, 2014. “As a result, our P&C insurance group will jump from the seventh to the second spot in the industry, with close to $4 billion in direct written premium volume.”