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OSFI data points to industry net income of $590 million in first quarter


June 1, 2004   by Canadian Underwriter


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Federally-regulated insurers posted net income of $589.6 million in the first quarter of 2004, according to data from the Office of the Superintendent of Financial Institutions (OSFI).
This result tops the $137.0 million in income insurers reported in the first quarter last year, and comes on the back of both investment and underwriting gains.
Net written premiums for the most recent quarter were $4.6 billion, up from $3.6 billion a year ago. And net earned premiums came in at $4.9 billion in the first quarter of 2004, compared to $4.0 billion the year prior.
Claims were also on the rise, however, growing to $4.7 billion for the most recent quarter from $4.2 billion a year ago. Nonetheless, the industry eked out underwriting income of $250.1 million in the first quarter of this year, compared to an underwriting loss of $171.7 million a year ago.
Investment income offered a strong boost, rising to $593.9 million this quarter from $398.8 million in the first quarter of 2003. Of this, realized gains growth was significant, with the industry producing gains of $234.3 million this year, compares to $76.5 million for the same period a year prior.
At the same time, the industry paid a hefty sum of $289.1 million in income taxes in the first quarter of 2004, compared to $64.7 million in early 2003.
Insurance Bureau of Canada (IBC) analysis of first quarter results (taking into account a wider swath of insurers) puts the industry’s combined ratio at 94.6%, with a 66.9% loss ratio and a rolling 12-month return on equity of 14.9%.


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