Economical Insurance of Waterloo, Ont. released Thursday its financial results for the quarter ending Sept. 30, recording net income of $29 million, up from $1.4 million during the same period in 2011.
The underwriting loss during the third quarter of 2011 was $7.8 million, while underwriting income was $4.6 million during Q3 of 2012. The improved results in underwriting offset a year-over-year decline in investment income, from $51.8 million during the third quarter of 2011 to $35.3 million during the same period this year.
"For the third quarter of 2012 the Company experienced weather-related catastrophic losses of $16.3 million, from several storms primarily in Alberta, compared to $31.3 million in 2011, which included $25.0 million from the Goderich tornado," Economical Insurance stated in a press release.
Q3 gross written premiums were up 7.4% year-over-year, from $430.8 million in 2011 to $462.5 million this year. Year-to-date, Economical reported gross written premiums of $1.357 billion this year, compared to $1.29 billion during the first nine months of 2011.
"The commercial property business recorded an underwriting loss of $7.5 million, an improvement of $12.7 million over the same quarter in 2011," the firm stated. "The improved results were supported by the reduction in weather-related catastrophic losses in the quarter year-over-year. Overall the commercial lines business posted a combined ratio of 105.0% during the first nine months of 2012, a 2.0 percentage point improvement over the prior year."
Economical Insurance has stated its officials are "actively pursuing two tracks as potential routes to demutualization – an initial public offering or a sponsored transaction with one or more strategic investors" as the federal finance department is working on draft regulations on demutualization.
Last month, Economical announced the sale of Seattle-based Mattei Insurance Services Inc. to Alteris Insurance Services Inc., plus the elimination of 145 positions.
In its press release Thursday, Economical Insurance said it will record a cost of about $6.8 million associated with the staff reduction in the fourth quarter.