The Cooperators faces financial “challenges” in 2007 Q1

The Cooperators General Insurance Company faced some financial challenges early this year, reporting a profit of Cdn$8.2 million in 2007 Q1 compared to a 2006 Q1 profit of Cdn$31.9 million.
The first quarter of 2007 posed significant challenges, Kathy Bardswick, president and CEO of The Co-operators, said in a press release issued by the company. Automobile claims frequency was up for the first quarter while average premium continues to decline due to the rate decreases taken in most areas of the country over the past two years.
In addition, the severity of claims in our other product lines increased significantly during the first quarter. Offsetting some of these market pressures are a strong balance sheet, good investment gains in the equity markets and new underwriting and risk selection initiatives already implemented.
The companys gross written premium decreased from Cdn$428 million in 2006 Q1 to Cdn$423 million in 2007 Q1.
The combined ratio was up 7.7% from 99.8% in 2006 Q1 to 107.5% in 2007 Q1.
Investment income and realized gains dropped 4.4% to Cdn$45 million.
The underlying strength of the company continues to be demonstrated in spite of first quarter challenges, Bardswick noted.