This quarterly earnings news release should be read in
conjunction with our first quarter 2022 unaudited condensed
consolidated interim financial statements and Management's
Discussion and Analysis (MD&A) as well as our 2021 Annual
Report which are available on SEDAR at www.sedar.com. Unless
otherwise noted, all amounts are expressed in Canadian
dollars.
GUELPH,
ON, May 6, 2022 /CNW/ - Co-operators
General Insurance Company (Co-operators General) today released
consolidated financial results for the three months ended
March 31, 2022. The consolidated net
income was $132.2 million compared to
net income of $197.8 million for the
same quarter in 2021. This resulted in earnings per common share of
$4.84 for the quarter, compared to
earnings per share of $7.36 in the
same period last year.
"Despite ongoing global and market uncertainty, coupled with
increased claims activity this quarter, our continued financial
stability is a testament to the resilience of our co-operative, and
our ability to protect the financial security of our clients,
members and communities," says Rob
Wesseling, CEO of Co-operators. "Our capital position will
enable us to meet the needs of the people we serve, not just in the
short-term, but long into the future."
CO-OPERATORS GENERAL'S FIRST QUARTER FINANCIAL
HIGHLIGHTS
($ in millions except
for earnings per share and ratios)
|
|
|
|
1st
quarter
|
1st quarter
|
|
2022
|
2021
|
Key financial
data
|
|
|
Direct written premium
(DWP)
|
906.0
|
840.6
|
Net earned premium
(NEP)
|
961.5
|
912.0
|
Net income
|
132.2
|
197.8
|
Total
assets1
|
8,625.8
|
9,008.5
|
Shareholders'
equity1
|
2,319.1
|
2,394.8
|
|
|
|
Key success
indicators
|
|
|
DWP growth
|
7.8%
|
1.4%
|
NEP growth
|
5.4%
|
4.5%
|
Underwriting income -
excluding market yield adjustment (MYA)
|
83.6
|
164.9
|
Earnings per common
share
|
$4.84
|
$7.36
|
Return on
equity
|
27.2%
|
46.1%
|
Combined ratio -
excluding MYA
|
91.3%
|
81.9%
|
Minimum Capital Test
(MCT)1
|
228%
|
239%
|
1Balance
sheet data and MCT results for 2021 are as at December
31
|
|
|
FIRST QUARTER REVIEW
The first quarter of the year saw DWP increase by 7.8% or
$65.4 million compared to the same
quarter of 2021 due to an increase in policies in force in the
travel line of business, combined with higher average premiums in
the commercial and home lines of business in all regions. NEP
increased during the first quarter by 5.4% or $49.5 million compared to the same quarter last
year, which was primarily attributable to the commercial and home
lines of business.
Undiscounted net claims and adjustment expenses increased by
$103.3 million compared to the same
quarter of 2021, while our loss ratio excluding MYA deteriorated by
8.2 percentage points to 58.8%. The increase in undiscounted net
claims and adjustment expense is primarily attributable to higher
unfavourable claims development and current accident year claims in
the auto and home line of business, and was offset by lower claims
activity in the farm line of business. Our expense ratio of 32.5%
increased 1.2 percentage points compared to the first quarter of
2021, driven by increased strategic initiative spend and staffing
costs. Consequently, our combined ratio excluding MYA increased to
91.3% in the quarter, an increase of 9.4 percentage points compared
to the same period last year.
During the first quarter, a rapid rise in interest rates
significantly impacted our results and financial position. The
discount rate used to measure our claims liabilities increased in
the quarter resulting in a favourable MYA of $71.0 million. The increase in discount rate was
greater than the increase in the comparative quarter, as a result,
the favourable MYA is $38.3 million
higher than the same quarter of last year.
Net investment income and gains of $19.9
million was recognized in the quarter, a decrease of
$44.6 million compared to the same
quarter of the prior year. The decrease was primarily driven by
unrealized losses on our preferred share portfolio, compared to
unrealized 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 97.0% of our bond portfolio considered investment grade
and 83.9% rated A or higher. Our equity portfolio is 83.4% weighted
to Canadian stocks.
CAPITAL
Co-operators General's capital position remains strong, as the
Minimum Capital Test for Co-operators General was 228% at
March 31, 2022, well above internal
and regulatory minimum requirements.
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. For further
information, refer to our first quarter 2022 MD&A or our 2021
Annual Report.
ABOUT CO-OPERATORS GENERAL INSURANCE COMPANY
With assets of more than $8.6
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. Achieving carbon neutral equivalency
in 2020, Co-operators General is committed to net-zero
emissions in its operations and investments by 2040, and 2050,
respectively. Co-operators is also ranked as a Corporate Knights'
Best 50 Corporate Citizens in Canada and is listed among the Best Employers
in Canada by Kincentric. For more
information, please 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.
FOR FURTHER INFORMATION, PLEASE
CONTACT:
Investor Relations
Lesley Christodoulou
Vice-President, Corporate Finance Services
1-888-767-3909 Ext: 302493
lesley_christodoulou@cooperators.ca
Media Relations
media@cooperators.ca
SOURCE The Co-operators Group Limited