February 28, 2011 by Canadian Underwriter
The Economical Insurance Group reported a 167% increase in net income in 2010, growing to $64.4 million from 2009’s net income of $24.1 million.
The insurer reduced its combined ratio for the year to 103.3% from 107.9% in 2009. It also achieved a 7.5-point improvement in its claims ratio, to 69.7% in 2010.
Overall, the insurer’s mix of business shifted slightly in 2010. Notably, its strategy to reduce overall exposure to unprofitable personal auto business, particularly in Ontario and the Greater Toronto Area, resulted in a 3% decrease in business represented by personal auto insurance.
Excluding the Ontario region, the personal automobile combined ratio was 92.6%, and the group’s personal property business posted a combined ratio of 94.3%, a marked improvement from 2009’s combined ratio of 112.2%.
Investment income dropped 10.9% during 2010 to $147.7 million for the year from $165.7 million in 2009.
The insurer posted a minimum capital test ratio of 234% at Dec. 31, 2010, a full 34% above the level reported during the financial crisis, the release continues.
“Economical’s improved 2010 results reflect the successful implementation of strategic initiatives focused on profitability rather than revenue,” said Katherine Mabe, The Economical’s president and CEO. “While the performance of the Ontario automobile insurance business continues to be unsatisfactory, all other business segments across the country are demonstrating positive trends.”