October 28, 2016 by Canadian Underwriter
The Co-operators General Insurance Company posted $16.3 million in consolidated net income for 2016 Q3 compared to a net loss of $21.4 million in the prior-year quarter.
“During the quarter, there were no material changes to the company’s estimated net losses for the Fort McMurray wildfires,” notes a statement from The Co-operators.
Results were positive on the premium front, with direct written premium (DWP) increasing 6.2% to $691.0 million in the third quarter of 2016 compared to $650.9 million in the third quarter of 2015. Year to date, DWP was $1,933.1 million in 2016 compared to $1,820.9 million in 2015, the company statement notes.
DWP improvements in 2016 Q3 “were attributable to policy and vehicle count growth in all lines of business paired with higher average home and farm premiums,” The Co-operators adds.
With regard to net earned premium (NEP), that again increased, up 4.9% to $614.8 million for the three months ended Sept. 30, 2016 compared to $586.0 million for the same period in 2015. “The increase in NEP is seen in all geographic regions and all product lines,” the insurer reports.
Year to date, NEP was $1,779.7 million in 2016, up from $1,703.9 million in 2015.
Excluding the market yield adjustment for 2016 Q3, The Co-operators notes that the combined ratio increased to 109.0% from 104.0% for the same period last year.
“Undiscounted net claims and adjustment expenses have increased by 11.6% from the third quarter of 2015, bringing the loss ratio to 77.2%,” the insurer reports.
“The increase was driven by the severity of current accident year claims across all lines of business, except farm, combined with higher unfavourable claims development within the auto line of business,” the statement adds.
“Our performance continues to be very strong, although our results reflect the impact of an increase in the severity of claims as well as significant unfavourable auto claims development during the third quarter,” Kathy Bardswick, president and CEO of The Co-operators, says in the statement.
“Offsetting our underwriting results was an improvement in our investment performance,” Bardwick points out. Net investment income and gains increased by $90.0 million in the third quarter of 2016 versus the prior-year quarter.
“In the third quarter of 2016, unrealized preferred share gains were $28.1 million higher than the same period in 2015, combined with realized common share and bond gains that were $29.9 million and $5.3 million higher, respectively,” the company notes. “Impairment losses and favourable currency movements also supported improved results,” the statement explains.
Other results for the third quarters of 2016 and 2015 include the following: