May 4, 2018 by Staff
The insurer saw its gross written premiums for the quarter decline by $17.8 million, down 3.7% from the same time a year ago.
Personal lines premiums grew by $16.7 million, representing a 5.3% increase over last year. This was attributable largely to new business growth generated by Sonnet, as well as increased personal property policy volumes sold through the broker channel.
Commercial lines premiums declined by $34.5 million, down 19.7%. Economical says it is currently implementing actions to improve commercial lines performance, and expects “downward pressure on the commercial lines premiums to continue throughout the rest of the year.”
“Poor winter weather conditions impacted our first quarter underwriting performance as unseasonably cold and frequent fluctuations in temperatures were experienced, particularly in January,” said Rowan Saunders, president and CEO of Economical. “In order to address our underwriting performance issues, we have continued to implement a range of previously announced corrective pricing, enhanced underwriting and broker management actions, with further actions planned this year.”
The insurer plans to roll out Vyne this year, which it expects will improve operating efficiency, pricing, underwriting and ease of doing business for brokers.
Overall, the insurer experienced an underwriting loss of $54.6 million in the quarter and a combined ratio of 109.9%, compared to a loss of $37.8 million and a combined ratio of 107.2% at the same time last year.
On the investment front, Economical’s total interest and dividend income was stable. Total recognized gains on investments decreased due to losses on bonds. Net income declined by $6.5 million compared to last year, due to underwriting losses, reduced investment income and restructuring expenses. The insurer’s total equity sits at approximately $1.7 billion, and it has a Minimum Capital Test ratio of 240%.
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This story was originally published by Canadian Insurance Top Broker.