August 12, 2009 by Canadian Underwriter
ICBC’s reported profit for the first six months of 2009 is Cdn$277 million, up from Cdn$255 million for the same period in 2008.
“The increase is the result of continued encouraging trends on claims, while ICBC is also managing its overall costs well,” B.C.’s public auto insurer reported. “Claims and related costs at ICBC dropped by Cdn$50 million to Cdn$1.46 billion for the first half of 2009 compared to Cdn$1.51 billion for the first six months of 2008.”
ICBC says its financial position would allow it to keep basic rates unchanged overall and to reduce optional rates for 2009 by an average of 3%, effective Oct. 1, 2009.
ICBC said its road safety initiatives, good weather, improved claims-handling procedures and a moderation in the growth of the number of vehicles on the road played a role in keeping claims costs down.
EGI Financial Holdings Inc. (TSX: EFH) saw its quarterly profit increase to $4.8 million in 2009 Q2, compared to $3 million in 2008 Q2.
“Our niche products division delivered solid performance during the second quarter of 2009 with increases in both net earned premiums and underwriting income, compared with the second quarter of 2008,” said EGI Financial CEO Douglas McIntyre said in a press release. “A significantly improved loss ratio in our Emergency Travel Health (ETH) line of business contributed to the niche products division’s increased underwriting income during the quarter.”
Overall, the company boosted its underwriting income from $22,000 in 2008 Q2 up to $1.7 million in 2009 Q2.
EGI Financial says it anticipates a hardening market in Ontario auto lines would ultimately be to its benefit as a non-standard auto insurance carrier.
“From an industry standpoint, we believe the worsening loss ratios in the Ontario automobile insurance market will continue to erode the margins of standard insurers, leading to rate increases and a tightening of underwriting selectivity,” McIntyre said. “In this type of hardening market, we expect to see new business flow to non-standard insurers such as EGI.”