EGI Financial Holdings posts 2009 Q1 loss of $230,000

EGI Financial Holdings Inc. (TSX: EFH) reported a 2009 Q1 loss of $230,000, down 108.9% from its 2008 Q1 profit of about $2.6 million.
“Despite our extensive re-engineering of the niche products division’s Emergency Travel Health (ETH) program and an encouraging start to the 2008-09 travel season in the fourth quarter of 2008, first quarter 2009 results failed to meet our expectations,” said Douglas McIntyre, CEO of EGI Financial.
“Adverse loss experience from this line of business, although measurably better than 2008, depressed our niche products division’s results.
“With the bulk of EGI’s current exposure limited to the second quarter, due to the peak travel period for policyholders in the winter months, the next quarter will determine what further remedial action may be necessary.”
McIntyre added that although “we continue to experience growing pains with the ETH offering, we remain encouraged with our seasoned personal lines and other niche products programs which continued to perform in line with expectations, generating attractive loss ratios of 70.1% and 55.1% respectively in the quarter.”
EGI Financial reported its investment income decreased from about $4.6 million in 2008 Q1 to $1.87 million in 2009 Q1.
The company reported a 2009 Q1 underwriting loss of $1.87 million, compared to a $397,000 underwriting loss in 2008 Q1.
The company said it stood to gain from an anticipated tightening of the Ontario auto insurance market.
“With Ontario automobile insurance market loss ratios deteriorating rapidly, we expect the erosion of standard line insurers’ margins will force them to increase rates and tighten their underwriting through 2009 and 2010,” McIntyre said. “This market firming will, we anticipate, create expanded growth opportunities for non-standard automobile carriers.
“As we move into a hardening market, EGI remains favourably positioned, relative to its competitors, to exploit growth opportunities as they arise.”