November 7, 2014 by Canadian Underwriter
EGI Financial Holdings Inc., which operates in the property and casualty insurance industry in Canada and Europe, has reported a net income of $5.537 million for the third quarter this year, more than doubling the $2.44 million for the same period of 2013.
The story was somewhat different for the first three quarters of the year, with EGI posting net income of $10.329 million for 2014 compared to $11.209 million for 2013, notes a statement issued Thursday by the company, which primarily focuses on non-standard automobile insurance and other niche and specialty general insurance products.
With regard to net operating income, the company posted $3.944 million for the three months ended Sept. 30, 2014 compared to $3.798 million for the same quarter in 2013. “The increase was primarily due to higher investment income, partially offset by lower underwriting income, compared to the prior year period,” EGI explains in the statement.
For the first nine months of 2014, the company’s net operating income was $7.885 million compared to $9.638 million for the same period in 2013.
On the underwriting front, EGI witnessed an underwriting profit of $0.122 million in 2014 Q3 compared to $1.157 million in 2013 Q3. For the first three quarters of the year, the company had an underwriting loss of $2.657 million compared to an underwriting income of $1.722 million for the same period in 2013.
“We are very pleased with our results for the quarter,” Steve Dobronyi, chief executive officer of EGI, noted in the statement. “All segments, products and geographies have simultaneously reported an underwriting profit,” Dobronyi says.
He pointed out that EGI’s Personal Lines has now reported an underwriting profit in 15 of the past 16 quarters, Specialty Programs reported an underwriting profit for the second consecutive quarter, Insurance Company of Prince Edward Island (ICPEI) produced an underwriting profit, and in Europe, the claims experience of United Kingdom auto insurance has returned to normal levels.
More specifically – comparing Q3 this year and Q3 2013 – Personal Lines generated underwriting income of $0.7 million (compared to $3.3 million); Specialty Programs recorded a $0.3 million underwriting profit (compared to a loss of $1.1 million); ICPEI recorded an underwriting profit of $0.3 million (first time ICPEI reported results under EGI); and International produced an underwriting income of $0.6 million (compared to $0.05 million).
Among the other results EGI reported for Q3 of 2014 are the following:
The Minimum Capital Test ratio of EGI’s Canadian subsidiary, Echelon General Insurance Company, at Sept. 30, was 218%, which comfortably exceeds the supervisory regulatory capital level required by the Office of the Superintendent of Financial Institutions, the company notes in the statement.
“On September 30, 2014, EGI injected $5 million of capital into its European subsidiary to support its strong premium growth and strengthen its regulatory ratios. As a result, EGI’s ownership stake will increase to 93% from 75% as at June 30, 2014, assuming no minority interest earn in,” the company added.
Noting that EGI’s strategy is working, “we remain focused on broker-sold auto products, supplemented by complementary product lines, specialty programs and small commercial risks,” Dobronyi said of the company. “Overall, we have a solid base of profitable business and a scalable underwriting platform to build upon and grow our company.”