May 27, 2003 by Canadian Underwriter
The group general insurance division of Desjardins Financial Corp. was a drag on overall earnings in the first quarter ending March 31, 2003, the Montreal-based financial services company says.
Gross written premiums were up 17% compared to the first quarter 2002, and net written premiums up 14%. However, claims were substantially higher for the quarter compared to last year, leading to an overall loss of $4.7 million, versus profit of $0.3 million in Q1 2002.
Overall the company reported net income of $19.4 million for the quarter, up from $17.8 million last year, although return on equity (ROE) dropped to 6.2% from 6.4%.
“The excellent business growth achieved by our insurance subsidiaries in 2002 was maintained in the first quarter of 2003,” says Monique F. Leroux, president of Desjardins Financial and CEO of its subsidiaries. “Moreover, the tough global economic environment due, in particular, to the conflict in Iraq continued to have an adverse effect on mutual fund activities and investment returns. In this context, we are particularly pleased with the corporation’s growth in net consolidated earnings.”
For 2002, Desjardins wrote gross premiums of $1.07 billion, mainly in Quebec, through its general insurance subsidiaries: The Personal, Certas Direct and Assurances Generales des caisses Desjardins. Net earnings were $32 million for the year, with an ROE of 10.5% and combined ratio of 96.8%.