Desjardins General Insurance Group reports 2007 Q3 gains

Despite reporting gains in its general insurance operations, Desjardins Group, an integrated cooperative financial group, recorded combined surplus earnings in 2007 Q3 of Cdn$248 million, down Cdn$80 million or 24.4% from the same quarter of 2006.
This decrease was primarily due to a write-down of 8.3%, or Cdn$160 million (pre-tax), related to non-bank-sponsored, asset-backed commercial paper (ABCP) holdings, Desjardins noted in a press release. Excluding this write-down, combined surplus earnings before member dividends would have been Cdn$355 million, up more than 8%.
The contribution of Desjardins General Insurance Group (DGIG) to Desjardins Groups 2007 Q3 results was Cdn$46.4 million, up 64.3% from a year earlier. This growth was due to an increase in underwriting profit, as well as to the solid performance of investments, Desjardins said in its statement. Return on equity rose to 39.8%, compared to 26.1% in the previous year.
For the first nine months of 2007, DGIGs contribution totalled Cdn$118.3 million, up from Cdn$87.8 million for the corresponding period of 2006. Return on equity rose to 32.3%, compared to 27.5% a year earlier.
The solid results for the first nine months of 2007 is explained by the declining claims experience in home insurance, which offsets the higher operating expenses ratio, the company noted. The increase of this ratio was attributable to major investment projects initiated by DGIG in the previous few months in order to enable it to reposition itself in terms of its competitive advantages.
Gross premiums written, totalling Cdn$1.084 billion, were up slightly from Cdn$1.078 billion for the first nine months of 2006, given the context of lower automobile insurance rates throughout the Canadian market, the company says.