Co-operators reports $42.3 million increase in Q4 profits

Co-operators General Insurance Company has reported a 2007 Q4 consolidated net income of Cdn$60.8 million, up from the Cdn$18.5 million it reported in 2006 Q4.
“The improvement was due to favourable automobile claims development, higher investment returns and tax recoveries,” the company announced in a release.
Net income for the entire year of 2007 amounted to Cdn$148.2 million, compared to Cdn$118.1 million for the same period last year.
The company said an “excellent claims development experience and higher realized investment gains” contributed to the increase in annual results.
“We are very pleased with our fourth quarter results, which included both strong underwriting and investment returns,” commented Kathy Bardswick, the president and CEO of The Co-operators. “Our claims development this quarter was exceptionally favourable, contributing to a combined ratio [COR] better than our target range, which further enhanced our strong capital position.”
CGIC’s 2007 Q4 combined ratio was 93.6%, compared to 99% for 2006 Q4. For the whole year of 2007, the combined ratio was 98.3% (the 2006 COR was 99.8%).
CGIC said its gross written premium in 2007 Q4 increased to Cdn$523.1 million, compared to Cdn$518.7 million in 2006 Q4, “primarily due to growth in policy count and insured values in the auto and home lines of business which was partially offset by lower commercial premium rates.”
Net earned premium growth for the quarter was 2.4% above the previous year due to growth in home and auto policies in western Canada. “In the Quebec market, two-year policies sold in 2006 continue to generate premium revenue despite lower sales in 2007,” the company reported.
The company reported its 2007 return on equity (ROE) was 13.5%, as opposed to its 2006 ROE of 12%.