Co-operators General profits soar on underwriting gains

Co-operators General Insurance Co. (TSX: CCS.PR.A) is reporting net income tripled in 2004, to hit $139.49 million, or $6.54 per share. This compares to income of $44.04 million, or $1.78 per share, reported in 2003.
For the fourth quarter of 2004, earnings reached $38.80 million, or $1.81 per share, up from $13.73 million, or $0.55 per share, in fourth-quarter 2003.
Stronger underwriting and a vastly improved loss ratio propelled the earnings increase. For 2004, the company posted a loss ratio of 64.0% (2003: 74.0%), while the overall combined ratio dropped to 94.9% in 2004 (2003: 103.2%). In the fourth quarter of 2004, the loss ratio improved to 59.4% (2003: 69.5%), while the combined ratio fell to 93.7% (2003: 100.6%).
Gross written premiums for 2004 were slightly higher at $1.99 billion (2003: $1.96 billion), and net earned premiums grew 9.1% to $1.72 billion (2003: $1.57 billion). In the fourth quarter of 2004, however, gross written premiums fell marginally to $495.08 million (Q4 2003: $507.81 million), although net earned premiums rose over the same period to $435.42 million (Q4 2003: $421.83 million).
Investment income grew slightly, up 3.4% in 2004 to $123.6 million from $119.5 million in 2003.
The Co-operators CEO Kathy Bardswick notes that the drop in fourth-quarter 2004 revenues was largely the result of auto insurance rate reductions and refunds the company provided as it returned to stable profitability. “We are hopeful that after several years of disappointing results we are moving toward greater market predictability, which ultimately means we can continue to be there for clients and offer more stable pricing.”