April 28, 2005 by Canadian Underwriter
E-L Financial (TSX: ELF), parent company of the Dominion of Canada General Insurance Co., posted net income for the first quarter of 2005 of $65.3 million, or $15.93 per share, up from $61.8 million, or $15.38 per share in first-quarter 2004.
Much of the gain comes from the general insurance segment, where net income for the quarter soared to $27.9 million, well above the $13.9 million reported a year earlier. Revenue from the general insurance operation was $289.4 million in the first quarter compared to $278.5 million a year earlier, while gain on sale of investments dropped to $1.9 million from $3.5 million over the same comparative period.
“Strong general insurance results in 2005 are benefiting from the tail
end of the underwriting cycle’s improvements in rates and claims
frequency,” says E-L chairman and CEO Duncan N.R. Jackman. However, he warns, “urrent price decreases in auto lines, emerging price
competition in commercial lines and an anticipated increase in claims
frequency are expected to exert downward pressure on general insurance
earnings for the balance of 2005 and for 2006.”
Overall, E-L reported operating income of $32.9 million, or $7.84 per share, in first-quarter 2005, versus $14.7 million, or $3.65 per share, a year prior.
The company reported revenue of $524.7 million in the most recent quarter, compared to $506.7 million a year earlier. In the first quarter of 2005, expenses rose to $424.1 million (Q1 2004: $406.5 million), while taxes were stable at around $33.5 million.
Investment and other income was $74.5 million in first-quarter 2005 versus $70.8 million in first-quarter 2004.
Capital and surplus at the end of the first quarter of 2005 stood at $1.74 billion, versus $1.44 billion a year prior.