Co-Operators General Insurance Company reported a 2010 Q2 net income of $6.5 million, marking a drop from the $13.9 million net income reported in 2009 Q2.
A market yield adjustment on its bond and mortgage portfolios resulted in an $11.5 million increase in claims expenses when compared to 2009 Q2, a company release said.
Return on equity in 2010 Q2 sank to 2.1% from 5.0% in 2009 Q2.
The combined ratio increased slightly quarter-over-quarter to 104.5% from 104% in 2009 Q2.
"The second quarter loss ratio was negatively impacted by the rapid escalation of auto claims in the Greater Toronto Area," a release says. "As the auto insurance product is highly regulated in Ontario, we and the industry, have been hampered in our ability to properly price for spiralling claims costs. We remain uncertain whether regulatory changes to be implemented Sept. 1, 2010 will remediate this imbalance between pricing and claims costs."
Offsetting the increased auto claims costs were improved home insurance results, the company said.
"The home line of business performed well due to increased pricing and client segmentation initiatives implemented in 2009."