This quarterly earnings news release should be read in
conjunction with our third 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, Nov. 4, 2022 /CNW/ - Co-operators General
Insurance Company (Co-operators General) today released
consolidated financial results for the three months ended
September 30, 2022. The consolidated
net income was $92.9 million compared
to net income of $86.8 million for
the same quarter in 2021. This resulted in earnings per common
share of $3.42 for the quarter,
compared to earnings per share of $3.20 in the same period last year.
"Hurricane Fiona had a devastating impact on our clients
and we are working diligently to support them. The affordability of
insurance and access to adequate protection will continue to be an
issue as climate change impacts increase in frequency and severity.
As this gap widens, we need to focus on prevention as well as
protection," said Rob Wesseling, CEO
of Co-operators. "Even with increases in insured losses, and the
negative impact of rising interest rates on our investment
portfolio, we are confident our strong capital position and the
resilience of our co-operative will enable us to continue working
towards our long-term vision to invest in resilient, sustainable
communities and provide financial security for Canadians."
CO-OPERATORS GENERAL'S THIRD QUARTER FINANCIAL
HIGHLIGHTS
($ in millions except for earnings per share and ratios)
|
3rd
Quarter
|
3rd Quarter
|
2022
|
2021
|
|
2022
|
2021
|
YTD
|
YTD
|
Key financial
data
|
|
|
|
|
Direct written premium
(DWP)
|
1,184.0
|
1,109.0
|
3,301.5
|
3,076.4
|
Net earned premium
(NEP)
|
1018.7
|
974.7
|
2,954.7
|
2,824.3
|
Net income
|
92.9
|
86.8
|
265.7
|
469.4
|
Total
assets1
|
8,863.7
|
9,008.5
|
8,863.7
|
9,008.5
|
Shareholders'
equity1
|
2,224.2
|
2,394.8
|
2,224.2
|
2,394.8
|
|
|
|
|
|
Key success
indicators
|
|
|
|
|
DWP growth
|
6.8 %
|
3.0 %
|
7.3 %
|
5.3 %
|
NEP growth
|
4.5 %
|
5.7 %
|
4.6 %
|
7.3 %
|
Underwriting income -
excluding market yield adjustment (MYA)
|
21.3
|
61.1
|
136.5
|
396.5
|
Earnings per common
share
|
$3.42
|
$3.20
|
$9.66
|
$17.32
|
Return on
equity
|
17.6 %
|
16.1 %
|
16.4 %
|
30.5 %
|
Combined ratio -
excluding MYA
|
97.9 %
|
93.7 %
|
95.5 %
|
86.0 %
|
Minimum Capital Test
(MCT)1
|
238 %
|
239 %
|
238 %
|
239 %
|
1Balance
sheet data and MCT results for 2021 are as at December
31
|
|
|
THIRD QUARTER REVIEW
The third quarter of the year saw DWP increase by 6.8% or
$75.0 million compared to the same
quarter of 2021 due to increases in policies in force in the auto
and commercial lines of business, combined with higher average
premiums in the commercial, home, and farm lines of business.
Travel DWP has also rebounded as the result of easing of pandemic
restrictions worldwide. NEP increased during the third quarter by
4.5% or $44.0 million compared to the
comparative quarter, which was primarily attributable to the
commercial and home lines of business combined with the rebounding
in the travel line of business.
Undiscounted net claims and adjustment expenses increased by
$70.5 million compared to the same
quarter of 2021 resulting in a deterioration of our loss ratio
excluding MYA of 4.3 percentage points to 64.8%. The increase in
undiscounted net claims and adjustment expense was primarily
attributable to increases due to Hurricane Fiona which swept
through the Atlantic provinces on September
24, 2022. Our expense ratio of 33.1% remained relatively
stable compared to the third quarter of 2021, as increased
strategic initiative spend and staffing costs were offset by
increased net earned premium. Consequently, our combined ratio
excluding MYA increased to 97.9% in the quarter, an increase of 4.2
percentage points compared to the same period last year due to the
impact of Hurricane Fiona.
During the third quarter, a 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 $20.3
million. The increase in discount rate was larger than the
increase in the comparative quarter and, as a result, there was a
favourable MYA increase of $18.0
million.
Net investment income and gains of $79.5
million were recognized in the third quarter. The increase
of $30.9 million compared to the
third quarter of 2021 was primarily driven by realized gains on
common equities and higher interest income. Higher unrealized
preferred share losses and unfavourable foreign exchange rates
partially offset the gain. Year to date net investment income of
$139.7 million was partially offset
by $76.6 million of net investment
losses leading to total net investment income and gains of
$63.1 million.
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 composed of high quality and well
diversified assets. The credit quality of our portfolio remains
high with 97.2% of our portfolio considered investment grade and
84.9% rated A or higher. Our equity portfolio is 84.6% weighted to
Canadian stocks.
CAPITAL
Co-operators General's capital position remains strong, as the
Minimum Capital Test for Co-operators General was 238% at
September 30, 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 third quarter 2022 MD&A or our 2021
Annual Report.
ABOUT US
Co-operators General is a leading Canadian multi-product
insurance company and is part of
The Co-operators Group Limited (Co-operators). Co-operators is a
leading Canadian financial services co-operative, offering
multi-line insurance and investment products, services, and
personalized advice to help Canadians build their financial
strength and security. The company has more than $61.5 billion in assets under administration.
Co-operators has been providing trusted guidance to Canadians for
the past 76 years. The organization is well known for its community
involvement and its commitment to sustainability. Achieving carbon
neutral equivalency in 2020, the organization 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 Citizen in Canada. 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:
Investor Relations
Lesley Christodoulou,
Vice-President, Corporate Finance Services
Telephone: 1-888-767-3909 Ext: 302493
Email: lesley_christodoulou@cooperators.ca
Media Relations
Email: media@cooperators.ca
SOURCE The Co-operators Group Limited