EGI Financial Holdings reports 2009 profit of $4.5-million, down 24.5% from 2008

EGI Financial Holdings Inc. is reporting a 2009 net income of $4.5 million, down 24.5% from its 2008 profit of $6 million.
“We are pleased to report a profitable 2009, despite facing some of the most challenging economic and industry conditions in recent memory,” said EGI Financial CEO Douglas McIntyre. “Our industry has faced a protracted soft market in recent years.
“Throughout this period we have preserved our capital and focused, where possible, on profitable lines of business in order to position ourselves to capitalize on the eventual turn of the market cycle. While it has taken longer than we expected to occur, we began to see signs of a hardening market toward the end of 2009, as our core personal lines division reported a 25% increase in premium volumes in the fourth quarter.”
The company’s net written premium in 2009 ($149.7 million) declined 5.3% from its 2008 total of $158.1 million.
McIntyre said in the release that the launch of EGI Financial’s U.S. subsidiary “has been delayed by the slow pace of the regulatory process,” although the management team, as well as the underwriting, claims and administration infrastructure is in place.
For the year ending in 2009, the company reported an underwriting loss of $9.3 million, as opposed to an underwriting profit of $163,000 in 2008.
The combined ratio was 106.3% in 2009, compared to its 99.9% COR in 2008.
“The primary reason for the increase was the higher loss ratio of 72.4% in 2009 compared to 67.3% in 2008,” the company said in a release.
During 2009 Q4, the loss ratio for the personal lines division was 88.1% (compared to 70.4% in 2008 Q4), which reflected an adverse claims experience, as well as a $1.9-million increase in reserves “to reflect the estimated additional costs related to the June 2010 implementation of the Harmonized Sales Tax in Ontario).