GUELPH, ON, Feb. 17, 2022 /CNW/ - Co-operators General
Insurance Company (Co-operators General) today announced its
consolidated financial results for the three months and year ended
December 31, 2021.
For the fourth quarter, Co-operators General reported
consolidated net income of $42.9
million, compared to $139.1
million for the same quarter in 2020. Earnings per common
share was $1.42 for the fourth
quarter, compared to $5.05 for the
same period last year. Direct written premium was $1,031.8 million in the quarter, an increase of
$43.7 million as compared to
$988.1 million in the same quarter of
2020.
Net income for the year amounted to $512.4 million, compared to $290.4 million in 2020. This resulted in earnings
per common share of $18.74 compared
to $10.49 in the previous year.
Direct written premium increased by 5.1% to $4,108.3 million, compared to $3,909.9 million in the prior year.
"Our ongoing efforts to improve underwriting profitability –
coupled with positive investment performance and lower claims
activity throughout the year – have led to strong financial results
and further solidified our capital position," says Rob Wesseling, CEO of Co-operators. "While
insured losses and community impacts of climate events in 2021 were
significant, our financial strength enables us to continue
innovating, investing in the resilience of our communities, and as
always, meeting the evolving needs of our wide range of members and
clients."
Co-operators General's Fourth Quarter Financial
Highlights
(in millions of
Canadian dollars except ROE, EPS and ratios)
|
|
|
|
|
|
4th
quarter
2021
|
4th
quarter
2020
|
2021
YTD
|
2020
YTD
|
|
Key financial
data
|
|
|
|
|
Direct written
premium (DWP)
|
1,031.8
|
988.1
|
4,108.3
|
3,909.9
|
Net earned premium
(NEP)
|
965.9
|
950.5
|
3,790.2
|
3,582.1
|
Net income
|
42.9
|
139.1
|
512.4
|
290.4
|
Total
assets
|
9,008.5
|
8,261.6
|
9,008.5
|
8,261.6
|
Shareholders'
equity
|
2,394.8
|
2,118.0
|
2,394.8
|
2,118.0
|
|
|
|
|
|
Key success
indicators
|
|
|
|
|
DWP growth
|
4.4%
|
4.5%
|
5.1%
|
4.2%
|
NEP growth
|
1.6%
|
9.7%
|
5.8%
|
9.4%
|
Underwriting income -
excluding market yield adjustment (MYA)
|
10.2
|
86.2
|
406.7
|
180.1
|
Earnings per share
(EPS)
|
$1.42
|
$5.05
|
$18.74
|
$10.49
|
Annualized return on
equity (ROE)
|
8.0%
|
33.3%
|
25.5%
|
16.2%
|
Combined ratio -
excluding MYA
|
99.0%
|
90.9%
|
89.2%
|
95.0%
|
Combined ratio -
including MYA
|
99.7%
|
92.9%
|
88.7%
|
97.7%
|
Minimum Capital Test
(MCT)
|
239%
|
232%
|
239%
|
232%
|
Fourth Quarter Review
Fourth quarter DWP increased by 4.4% or $43.7 million compared to the same quarter of
2020, while NEP increased 1.6% or $15.4
million over the same quarter. This DWP and NEP growth was
attributable to higher average premiums combined with an increase
in policies in force in the commercial and home lines of
business.
Our combined ratio, excluding MYA, deteriorated 8.1 percentage
points to 99.0% compared to 90.9% in the fourth quarter of 2020.
This was primarily driven by an increase in our expense ratio,
which deteriorated 5.1 percentage points to 38.2%, due to increases
in operating costs from higher strategic initiative spend. Our
fourth quarter loss ratio, excluding MYA, also deteriorated 3.0
percentage points to 60.8%, a result of higher major events,
including a catastrophic flooding event in British Columbia.
Net investment income and gains for the fourth quarter was
$44.5 million, a decrease of
$63.7 million compared to the same
quarter in the prior year. The decrease was primarily driven by
unrealized preferred share losses and realized bond losses, which
is in contrast to unrealized preferred share gains and realized
bond gains in the same quarter of the prior year.
Our balance sheet, liquidity and capital positions remain strong
and enable us to continue to serve and meet the needs of our
clients while also supporting our strategic areas of focus. Our
investment portfolio is comprised of high quality and well
diversified assets. The credit quality of our portfolio remains
high with 96.4% of our portfolio considered investment grade and
83.6% rated A or higher. Our equity portfolio is 83.5% weighted to
Canadian stocks.
Annual Review
DWP for the year increased by 5.1% to $4,108.3 million, compared to $3,909.9 million in 2020. The increase was driven
by higher average premiums across all lines of business and
geographical regions, particularly in the commercial and home lines
of business.
NEP increased by $208.1 million or
5.8% to $3,790.2 million as a result
of growth seen across all our geographic regions and all core lines
of business.
Excluding the MYA, the combined ratio improved by 5.8 percentage
points from 95.0% in 2020 to 89.2% in 2021. This was largely the
result of premium growth coupled with lower claims activity in the
commercial and auto lines of business, partially offset by higher
claims activity in the home and farm lines of business. The expense
ratio deteriorated by 2.3 percentage points, due to increased
operating expenses from strategic initiative spend and higher
staffing costs.
Net investment income and gains decreased by $51.1 million compared to the prior year as a
result of realized losses on bonds due to rising interest rates,
combined with lower realized gains on common shares, due to lower
turnover compared to the prior year. These were partially offset by
higher unrealized gains on preferred shares and lower impairment
losses when compared to the prior year.
Capital
Co-operators General's capital position remains strong, as the
Minimum Capital Test for Co-operators General was 239% at
December 31, 2021, well above
internal and regulatory minimum requirements. We continue to
closely monitor capital levels in response to the changing economic
environment as it relates to the COVID-19 pandemic.
Caution Regarding Forward-looking Statements
This document may contain forward-looking statements and
forward-looking information, including statements regarding the
operations, objectives, strategies, financial situation and
performance of Co–operators General. These statements generally can
be identified by the use of forward-looking words such as "may",
"will", "expect", "intend", "estimate", "anticipate", "believe",
"plan", "would", "should", "could", "trend", "predict", "likely",
"potential" or "continue" or the negative thereof and similar
variations. These statements are not guarantees of future
performance and involve known and unknown risk, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in the forward-looking statements
or information, including the impact of the COVID-19 pandemic on
our investments, operations and claims negatively affecting the
results of our operations and financial position. Although we
believe that the expectations reflected in the forward-looking
statements and information are reasonable, there can be no
assurance that such expectations will prove to be correct.
Consequently, we make no representation that actual results
achieved will be the same in whole or in part as those set out in
the forward-looking statements and information.
About Co-operators General Insurance Company
With assets of more than $9.0
billion, Co-operators General is a leading Canadian
multi-product insurance company. Co-operators General is part of
The Co-operators Group Limited, a Canadian co–operative. Through
its group of companies, it offers home, auto, life, group, travel,
commercial and farm insurance, as well as investment products.
Co-operators is well known for its community involvement and its
commitment to sustainability. Co-operators is ranked as one of the
Corporate Knights' Best 50 Corporate Citizens in Canada and is listed among the Best Employers
in Canada by Kincentric (formerly
AON). For more information, visit www.cooperators.ca.
Co-operators General Class E, Series C Preference Shares trade
under ticker symbol CCS.PR.C on the Toronto Stock Exchange (TSX).
Further information can be found at www.cooperators.ca.
SOURCE The Co-operators Group Limited