Mississauga, Ont.-based Canadian P&C insurer Echelon Financial Holdings Inc. has reported a Canadian combined operating ratio of 94% for the three months ending March 31, down from 100% in Q1 2016 and driven by strong results in both personal and commercial lines.
Echelon recorded net income attributable to shareholders on continued operations of $7.5 million for the three months ending March 31, up from $0.9 million in Q1 2016. Net operating income was $2.3 million in the first quarter, compared to an income of $1 million in Q1 2016, Echelon said in a press release on Wednesday.
Personal lines generated underwriting income of $1.9 million compared to an underwriting income of $0.7 million in the same period last year, primarily due to strong performance in non-standard auto and motorcycle, partially offset by weaker performance in Atlantic Canada related to severe winter weather conditions.
Commercial lines generated an underwriting income of $1 million compared to a $0.8 million underwriting loss in the same period last year, primarily due to strong performance in warranty, commercial property and liability lines, Echelon said in the release.
Direct written premiums increased by 30% to $54.6 million, primarily due to growth in Ontario personal lines and Quebec commercial lines, driven by broker transfers on existing products and the launch of new products in 2016.
Investment income was $8.5 million compared to $3.9 million in the first quarter of 2016, primarily due to realized foreign exchange gains arising on investment hedges from the sale of European operations. The total pre-tax gain on invested assets was $5.1 million in the quarter compared to pre-tax loss of $0.6 million in the first quarter of 2016, primarily due to strong performance of preferred share and fixed income investments.
Net favourable development of prior-year claims of $3.3 million was recorded in Q1 2017 compared to favourable development of $2.1 million in the same period in 2016.
Echelon CEO Serge Lavoie said in the release that the company was pleased to report strong results in the quarter in both personal and commercial lines despite adverse weather conditions in the Maritime provinces. He added that Echelon’s “full suite of products is being well-received by the broker community, and the introduction of our enhanced systems will continue to support Echelon’s growth in 2017 and beyond. We look forward to further building our relationships with our brokers across Canada, and are committed to building strong and sustainable insurance solutions, aligned directly to their needs.”
Founded in 1998, Echelon focuses primarily on non-standard auto insurance and other specialty P&C insurance products. The company operates and distributes insurance products through Echelon Insurance and The Insurance Company of Prince Edward Island.