Northbridge gains on underwriting and investments for 2-Q

Toronto-based Northbridge Financial Corp. (TSX: NB) – the listed property and casualty primary insurance arm of the Fairfax group – increased net earnings by 250% to $57.5 million for the second quarter of this year compared with the $16.4 million shown for the same period in 2002. The latest earnings equal $1.16 a share versus the 36c a share shown for the comparable period in 2002. The company has declared a dividend of 15c a share which will be paid to shareholders registered by August 29 by the end of September, a company statement says.
For the first half of this year, Northbridge’s net earnings climbed year-on-year by more than four-fold to $86.5 million (2-Q 2002: $21 million). The company’s revenue rose to $323.4 million for the second quarter of this year compared with the $191.4 million shown for the same period in 2002, while the first half-year result produced revenue of $572.8 million versus the $369 million reported for the first six months of 2002.
The Northbridge operations were able to increase net written premiums for the second quarter of this year by 41% year-on-year to $308.8 million, with the six month review showing a 39% year-on-year gain to $547.4 million. “Through the first half of 2003 our operating companies have continued to achieve rate increases and to generate new business volumes during the continued ‘hard’ insurance market conditions,” the company statement says.
The company generated an underwriting profit of $15.2 million for the second quarter of this year compared with $7 million shown for the same period in 2002. The underwriting profit for the first six months of this year came in at $25.3 million (June 2002: $6.2 million). As a result, the combined ratio dropped to 93.7% for the second quarter of this year against the 95.8% recorded at the end of last year’s second quarter. The combined ratio for the first half of this year came in at 94.5% compared with the 98.2% reported at the end of June 2002. Furthermore, the company statement notes that, “our earnings received a significant contribution from our investment portfolio, with pre-tax net investment income of $80.3 million for the [second] quarter [of this year], and $109.9 million for the six months, including net realized gains of $63.6 million and $69.3 million respectively”.