Canadian Direct reports third straight record quarterly profit

Canadian Direct Insurance has posted its third consecutive record quarterly profit, reporting a $3.6-million net income in 2010 Q3, up $300,000 from a year ago.
“The strong results were driven by a 7% increase in net earned premiums, partially offset by a higher claims and policy acquisitions costs,” Canadian Direct’s parent company, Canadian Western Bank (CWB), reported in a press release.
The increase in premiums reflected a 6% increase in policies outstanding and higher average premiums per policy in home lines of business.
“Increased claims costs included $1.3 million (net of reinsurance) attributed to a severe July hail storm in Alberta,” CWB said.
Canadian Direct’s results included a positive $800,000, before-tax contribution from Canadian Direct’s share of the Alberta auto risk sharing pools. “The pools’ results reflect a favourable adjustment to claims reserves due to revised actuarial assumptions,” CWB stated.
Canadian Western Bank predicted the 5% rate reduction ordered by the Alberta Insurance Rate Board in 2010-11 would “have a negative impact on revenues for the Alberta auto line of business.”