Northbridge earnings up on strong underwriting and investments

Northbridge Financial Corp. (TSX: NB), which includes the Canadian operations of Fairfax Financial, posted an impressive 92.7% combined ratio for the third quarter ending September 30, 2003 to boost the company’s earnings to $22.8 million, or $0.45 per share, for the period. This compares with net earnings of $15.8 million, or $0.34 per share, for the third quarter last year.
The company’s total revenue was up to $278.5 million for the third quarter, from $2250 million a year earlier. And its underwriting profit was a strong $18.9 million, up from $5.7 million a year prior. Investment income for the quarter was $20.2 million.
For the first nine months of 2003, the company’s net earnings are $109.3 million, or $2.21 per share, versus $36.7 million, or $0.79 posted at the same point a year earlier. Its combined ratio for the nine months is 93.9%, versus 97.8% the year prior, for an underwriting profitof $44.1 million, versus just $12 million in the first nine months a year ago. Total revenue was up to $851.8 million for the first three quarters combined, versus $594.3 million at the same point in 2002. Investment income for the first nine months of this year is $130.1 million, including net realized gains of $71.8 million. As of the end of September, pre-tax unrealized gain on investments sat at $107.1 million, versus $99.8 million a year prior.
The company says, “through the first nine months of 2003 our operating companies have continued to achieve rate increases and to generate new business volumes during the continuing “hard” insurance market conditions”. This, combined with investment income, has led to earnings growth, the company says.