November 20, 2003 by Canadian Underwriter
Montreal-based Optimum General continued to climb back into the black in the third quarter ending September 30, 2003, posting net profit of $411,000, or $0.04 per share, compared with a net loss of $743,000, or $0.07 per share, in third-quarter 2002. For the first nine months of 2003, the company posted net profit of $903,00, or $0.08 per share, versus a net loss of $2.7 million, or $0.25 per share, for the same period a year ago.
Gross written premiums (GWP) for the third quarter of 2003 are $39.35 million, versus $37.44 million a year prior. This is despite the company’s decision to exit many lines of business that were proving unprofitable. For the nine-month period, GWP were $106.98 million versus $110.90 million for the first nine months of 2002. Net earned premiums for third-quarter 2003 are $23.53 million compared to $24.25 million a year ago. And for the first nine months the year, net earned premiums are $71.43 million, compared to $71.94 million at the same point a year prior.
The company’s claims ratio improved to 59.1% for the most recent quarter, versus 65.2% a year ago. And for the nine-month period, the claims ratio dropped to 59.4% from 71.9% for the same period a year prior.
For the third quarter of 2003, the company has a combined ratio of 102.7%, producing an underwriting loss of $630,000. This compares with a combined ratio of 111.2%, producing an underwriting loss of $2.7 million, for third-quarter 2002.
Year-to-date the combined ratio sits at 103%, for an underwriting loss of $2.1 million, versus a combined ratio of 115.5%, and underwriting loss of $11.2 million, recorded for the first nine months of 2002.
Investment income declined to $1.3 million in the most recent quarter, from $1.4 million a year ago. And year-to-date, investment income is down to $3.4 million from $6.1 million the year before.
“There is no doubt that our decision to withdraw from unprofitable territories and programs has improved our results,” says Optimum General president and COO David Liddle. “The hardening of the insurance market in most of Canada, characterized by substantial rate increases, is also contributing to the turnaround in our results.”