Levis, Que.-based Desjardins General Insurance Group (DGIG) released its second quarter financial results on Friday, reporting an estimated expense of $30.2 million after reinsurance and income taxes related to the Fort McMurray wildfire and a combined ratio of 99.1%.
“The devastating wildfires in the Fort McMurray area in May were a reminder of how lives can change in a moment, with a shift in wind direction, and of the crucial role insurance plays in helping people recover and move on with their lives,” said Sylvie Paquette, co-president of DGIG, in a statement. “Our claims teams were at the evacuation centres to support our clients and to write cheques to help them with living expenses, and they were in Fort McMurray a month later to welcome them back and to quickly deal with their claims.”
The 99.1% combined ratio, excluding market yield adjustment, was up considerably from 72.6% in the second quarter of 2015. For the first half of 2016, ending June 30, DGIG reported a combined ratio of 100.5% compared to 88.2% in H1 2015.
For the quarter ending June 30, Desjardins said its net income was $48.4 million compared to $184.8 million for the corresponding quarter in 2015. “These variations reflect higher auto insurance losses in Ontario and the estimated expense of $30.2 million (after reinsurance and income taxes) related to the Fort McMurray wildfires,” DGIG said. For H1 2016, net income was $79.8 million compared to $258.5 million in H1 2015.
Net premiums for Q2 2016 were $1.74 billion and $3.46 billion in the first half of the year, compared to $1.72 billion in Q2 2015 and $3.57 billion in H1 2015. “Higher premiums in life and health insurance and in property and casualty insurance generated a $42 million or 2.5% increase in net premiums,” Desjardins said in the statement.
Direct premiums written (DPW) were $1.3 billion, an increase of 14.5% from $1.1 billion. “This growth is mainly attributable to the renewal of auto policies acquired from State Farm, whose terms are transitioning from six to 12 months, as well as growth initiatives in all areas and lines of business,” Desjardins reported. Year-to-date DPW were $2.3 billion compared to $2 billion in H1 2015.
The statement also referenced the recent restructuring at Desjardins Group, which introduced a change in leadership when Denis Dubois was appointed co-president of the organization.
“I have worked closely with Denis over the past number of years charting the future of DGIG, and I have the outmost confidence in his leadership capabilities,” Paquette said. “I am also incredibly proud of DGIG’s record of customer experience, employee engagement and profitable growth. The organization is in a strong position and will be in very capable hands as it continues to evolve and grow.”
Dubois said that it is a privilege to serve as co-president “and to continue benefitting from her experience through the current leadership transition. I am honoured by the responsibility of building on Sylvie’s legacy and leading DGIG at such an exciting time in its history.”
A subsidiary of Desjardins Group, DGIG distributes property and casualty insurance under the Desjardins Insurance, The Personal and State Farm Canada brands.