This quarterly earnings news release should be read in
conjunction with our second quarter 2024 unaudited condensed
consolidated interim financial statements and management's
discussion and analysis (MD&A) as well as our 2023 Annual
Report which are all available on SEDAR+ at www.sedarplus.com.
Unless otherwise noted, all amounts are expressed in Canadian
dollars.
GUELPH,
ON, July 30, 2024 /CNW/ - Co‑operators General
Insurance Company (Co-operators General) today released
consolidated financial results for the three months ended
June 30, 2024. The consolidated net
income was $95.7 million compared to
$29.9 million for the same quarter in
2023. This resulted in earnings per common share of $3.36 for the quarter, compared to $0.94 in the same period last year.
"Our continued focus on disciplined growth and an improved
claims experience during the second quarter resulted in an
underwriting gain," said Rob
Wesseling, President and CEO of Co‑operators. "This result,
coupled with another strong quarter of investment results, helps
ensure our overall capital position remains strong and allows us to
continue supporting our clients while investing in a resilient and
sustainable society."
CO-OPERATORS GENERAL'S SECOND QUARTER FINANCIAL
HIGHLIGHTS
($ in millions, except for earnings per common share and
ratios)
|
2nd
quarter
|
2nd quarter
|
YTD
|
YTD
|
|
2024
|
2023
|
2024
|
2023
|
Key financial
data
|
|
|
|
|
Direct written premium
(DWP)
|
1,516.3
|
1,321.4
|
2,635.7
|
2,315.5
|
Net insurance revenue
(NIR)
|
1,186.8
|
1,045.4
|
2,309.5
|
2,063.0
|
Net income
|
95.7
|
29.9
|
142.9
|
53.1
|
Net investment income
and gains
|
63.9
|
39.9
|
169.6
|
143.3
|
Total
assets1
|
7,839.9
|
7,695.7
|
7,839.9
|
7,695.7
|
Shareholders'
equity1
|
2,648.1
|
2,575.2
|
2,648.1
|
2,575.2
|
|
|
|
|
|
Key success
indicators
|
|
|
|
|
DWP growth
|
14.7 %
|
9.9 %
|
13.8 %
|
10.0 %
|
NIR growth
|
13.5 %
|
7.9 %
|
11.9 %
|
7.1 %
|
Underwriting result -
excluding discounting and risk adjustment
|
75.0
|
(59.9)
|
5.8
|
(94.0)
|
Earnings per common
share (EPS)
|
$3.36
|
$0.94
|
$5.05
|
$1.76
|
Return on equity
(ROE)
|
15.4 %
|
4.7 %
|
11.2 %
|
4.2 %
|
Combined ratio -
excluding discounting and risk adjustment
|
93.8 %
|
105.7 %
|
99.8 %
|
104.6 %
|
Minimum Capital Test
(MCT)1
|
223 %
|
236 %
|
223 %
|
236 %
|
1 Financial
position data and MCT results for 2023 are as at December
31
|
|
|
|
|
SECOND QUARTER REVIEW
In the second quarter, DWP increased by 14.7% to 1,516.3 million
compared to the same quarter of 2023, while NIR increased by 13.5%
to $1,186.8 million compared to the
same quarter last year. The increase in DWP was across all core
lines of business, with the auto line of business being the largest
contributor, with an increase of 22.9%. Similarly, DWP increased
across all regions with the Ontario region being the major contributor
with an increase of 17.3%. DWP and NIR growth was a result of
higher average premiums and growth in vehicles and policies in
force attributable to both higher retention and new business.
Co‑operators General's underwriting income, excluding
discounting and risk adjustment, for the second quarter of 2024 was
$75.0 million, an increase of
$134.9 million from the underwriting
loss of $59.9 million in the same
quarter of 2023. The favourable result was primarily due to a
combination of growth in NIR of $141.4
million and decline in the net undiscounted claims and
adjustment expenses by $6.0 million,
when compared to the second quarter of 2023.
The decline in net undiscounted claims and adjustment expenses
was primarily driven by improved prior year claims development and
lower major event activity across all lines of business and
regions. Acquisition and other expenses increased by $12.5 million compared to the same quarter of
prior year, primarily due to higher base commissions across all
lines of business in line with the growth in NIR during this
quarter.
The combined ratio, excluding discounting and risk adjustment,
improved by 11.9 percentage points from the comparative quarter.
The improvement was driven by the favourable changes in
underwriting results. When including discounting and risk
adjustment, the combined ratio improved by 5.4 percentage points
over the comparative period.
Net investment and insurance finance result was an expense of
$1.4 million for the quarter, a
decline of $67.5 million, compared to
an income of $66.1 million in the
same quarter of prior year. The decline was primarily due to an
increase of $91.4 million in total
net finance expense from insurance and reinsurance contracts when
compared with the same period in the prior year.
Net investment income and gains was $63.9
million for the quarter, an increase of $24.0 million compared to the total net
investment income of $39.9 million in
the comparative quarter. The increase was primarily driven by
unrealized gains on bonds and limited partnerships, and higher
interest and dividend income. The favourable movements were
partially offset by net losses on common shares.
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 97.1% of bond portfolio considered investment grade and
82.2% rated A or higher. Our equity portfolio is 81.8% weighted to
Canadian stocks.
CAPITAL
Co-operators General's capital position remains strong, as the
Minimum Capital Test for Co‑operators General was 223% as at
June 30, 2024, well above internal
and regulatory minimum requirements. We continue to closely monitor
capital levels in response to the changing economic
environment.
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," and "continue," or the negative thereof and similar
variations. These statements are not guarantees of future
performance, and they involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in the
forward-looking statements or information. We believe that the
expectations reflected in the forward-looking statements and
information are reasonable; however, there can be no assurance that
such expectations will prove to be correct. We cannot guarantee
future results, levels of activity, performance or achievements.
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 second quarter 2024 MD&A or our 2023
Annual Report.
ABOUT US
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. Co‑operators has more than
$65 billion in assets under
administration and has been providing trusted guidance to Canadian
since 1945. The organization is well known for its community
involvement and its commitment to sustainability. Currently a
carbon neutral organization, Co‑operators 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.
Co‑operators General Class E Preference Shares Series C, trade
under ticker symbol CCS.PR.C on the Toronto Stock Exchange
(TSX).
For more information, please visit: www.cooperators.ca.
CONTACT INFORMATION
Investor Relations
Lesley Christodoulou
Vice-President, Finance, Accounting, Reporting and Chief
Accountant
Email: lesley_christodoulou@cooperators.ca
Media Relations
Email: media@cooperators.ca
SOURCE The Co-operators Group Limited