Economical Insurance has reported a 5.6% increase in gross written premiums for 2012 from the previous year, along with increasing its net income by 68% over 2011.
The Waterloo, Ont.-based insurer reported consolidated net income of $43.2 million for the fourth quarter of 2012 compared to $37.5 million a year ago, an increase of $5.7 million. For the full year, net income for 2012 increased by $61.7 million, to $152.7 million.
The company also generated underwriting income of $15.8 million for Q4 and saw a total increase of $28.3 million over 2011. Its gross written premiums for the year totalled roughly $1.8 billion.
The insurer’s combined ratio for the year was 96.4%, compared to 98.1% in 2011.
Of note, a relatively quiet year in terms of severe weather resulted in a $40 million reduction in catastrophic weather-related losses year over year across all lines of business.
“Our efforts to strategically reposition our business are reflected in our strong performance for 2012,” noted Karen Gavan, Economical’s president and CEO.
“To sustain this profitability and competitiveness going forward, we will continue to focus on our execution against our strategy to grow profitably and improve our productivity levels and service delivery to our broker partners and customers,” she added, commenting on what the company has dubbed its business transformation program.
“In support of this program, we anticipate making significant investments in 2013 and 2014 which we expect will unlock sustainable benefits in the longer term.”
“At the same time, we are continuing to work toward putting ourselves on a level playing field with our competitors through demutualization,” she added. “With the access to capital that demutualization will bring, we will be able to participate in industry consolidation and achieve scale – which is key to being a market leader in our industry.”
“Although the process of developing the regulations required for demutualization to move forward has taken much longer than anyone had originally expected, the Department of Finance has assured us that it is committed to developing them as soon as it is able.”