The Co-Operators report increasing claims costs in Q2

**CORRECTION** This item corrects information previously published on Aug. 5, in which the company’s six-month profit figures were mixed up with the gross written premium figures. Canadian Underwriter apologizes for the error.

The Co-Operators General Insurance Company reported a 2008 Q2 profit of Cdn$40.6 million, compared to a net income of Cdn$48.9 million in 2007 Q2.
For the first six months of 2008, the company has reported a profit of Cdn$51.1 million, a decrease over the same period of last year, when it reported a profit of Cdn$57.1 million.
The company’s net earned premium for the quarter was $492.3 million, an increase over 2007 Q2’s $472.4 million, a release says.
“Growth in personal automobile and home lines of business occurred primarily in Western Canada and Quebec through rate increases, insured value increases, strong client retention and the impact of two year policies in Quebec,” the company statement says.
“These were partly offset by price reductions in the commercial line of business due to the continuing soft market,” it adds.
Loss ratio increased to 70.0% in 2008 Q2 when compared to 61.8% for the same period of 2007.
The combined ratio of claims and operating expenses for Q2 was 102.6%, compared to 92.5% in 2007 Q2.
“The company’s underwriting results were challenged by higher claims in both the home and auto lines, higher expenses related to strategic investments and earned premium that was lower than planned,” said Kathy Bardswick, president and CEO of The Co-Operators General.
“However, strong equity and bond gains as well as the strategic divestment of real estate assets positively impacted our second-quarter results.”