Tough winter conditions batter ING Canada’s 2008 Q1 results

Record snowfalls and severe winter storms in central Canada caused ING Canada’s 2008 Q1 profit to shrink from Cdn$126.2 million down to Cdn$23 million.
ING Canada also cited lower operating income and declines in equity markets as factors in its 2008 Q1 results.
“The harsh winter conditions during the first three months of the year adversely impacted an otherwise solid operating performance,” ING Canada president and CEO Charles Brindamour said in a press release.
“Our commercial insurance profitability improved significantly and our current year automobile insurance results remained stable despite the difficult driving conditions resulting from the weather conditions in Quebec and Ontario.
“However, numerous storms and near-record snow falls in central Canada resulted in a loss on our home insurance activities. While the industry’s loss ratios are usually higher during the first quarter, this year’s weather conditions had a more severe impact than usual.”
Overall, the company’s combined ratio increased by 3.9 percentage points during the quarter to reach 99.9%. Its return on equity over the past 12 months was 13.0%.
Commercial insurance underwriting income improved markedly, the company noted, increasing to Cdn$20.6 million up nearly 10-fold from last year as a result of favourable prior-year developments.
The company’s results include the fact that it increased its direct premiums written in 2008 Q1 by 1.7%. ING Canada’s direct premiums written reached Cdn$860.3 million during the quarter, driven, the company said, “by higher average amounts insured and higher rates for home and auto insurance.”