December 1, 2003 by Canadian Underwriter
Montreal-based Optimum General continued to climb back into the black in the third quarter ended September this year, posting a net profit of $411,000, equal to 4 a share for the period compared with a net loss of $743,000, or 7 a share shown for the third quarter of 2002. For the first nine months of 2003, the company posted a net profit of $903,00, equivalent to 8 a share versus a net loss of $2.7 million, or 25 a share, reported for the same period a year ago.
Gross written premiums (GWP) for the third quarter of 2003 came in at $39.35 million compared with $37.44 million disclosed a year ago. The growth in revenue was achieved despite the company’s decision during the course of this year to exit many lines of business that were unprofitable. For the nine-month period, GWP were $106.98 million versus $110.90 million for the first nine months of 2002. Net earned premiums for the third quarter of 2003 came in at $23.53 million against the $24.25 million made a year ago. For the first nine months the year, net earned premiums clocked in at $71.43 million compared with the $71.94 million reported for the same period last year.
The insurer’s claims ratio improved to 59.1% for the most recent quarter, versus 65.2% a year ago. And, for the nine-month period, the claims ratio dropped to 59.4% from 71.9% for the same period a year prior.
For the third quarter of 2003, the company has a combined ratio of 102.7%, producing an underwriting loss of $630,000. This compares with a combined ratio of 111.2%, (with an underwriting loss of $2.7 million) reported for the third quarter of 2002. Year-to-date, the combined ratio sits at 103%, resulting in an underwriting loss of $2.1 million versus a combined ratio of 115.5% and underwriting loss of $11.2 million recorded for the first nine months of 2002.
The insurer’s investment income declined to $1.3 million for the most recent quarter, from $1.4 million a year ago. Year-to-date, investment income is down to $3.4 million from $6.1 million the year before. “There is no doubt that our decision to withdraw from unprofitable territories and programs has improved our results,” says Optimum General president David Liddle.