Optimum rebounds in Q-1 on improved loss experience

Quebec-based Optimum General Inc. (TSE: OGI.A) posted a modest recovery in net taxed income for the first quarter of the 2002 financial year as the insurer’s loss ratio eased back mostly as a result of improved pricing conditions. The company’s net after-tax income for the latest reporting period came in at $290,000, equal to 3c a share, compared with the $121,000 or 1c a share shown at the end of the same period a year prior.
Optimum’s gross premiums for the first quarter of this year dropped back to $31.5 million against the $40.4 million reported a year ago. The insurer attributes this decline to a more stringent approach to underwriting. However, the company’s underwriting experience remained negative for the first three months of this year, with a loss of $1.5 million. The loss ratio for the latest reporting period did drop back to 63% compared with the 72.5% level shown at the end of the first quarter of 2001. The combined ratio clocked in at 106.4% at the end of March this year, showing modest improvement from the 110.2% of a year prior. Optimum’s investment performance during the latest quarter also suffered a 23% decline year-on-year, with investment income clocking in at $2 million compared with the $2.6 million reported at the end of March 2001.
Optimum also announced senior management changes, with Jean-Claude Page appointed as the CEO and vice-chairman. "Our claims ratio has greatly improved, and we are now beginning to see the benefits of the stringent underwriting policy we introduced in 2001 to better assess our risks," says Page.