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Co-operators General Insurance Company Reports Third Quarter 2021 Results

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This quarterly earnings news release should be read in conjunction with our third quarter 2021 unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2020 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.

GUELPH, ON, Oct. 28, 2021 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended September 30, 2021. The consolidated net income was $86.8 million compared to net income of $152.3 million for the same quarter in 2020. This resulted in earnings per common share of $3.20 for the quarter, compared to earnings per share of $5.67 in the same period last year.

The Co-operators Group Limited - logo (CNW Group/The Co-operators Group Limited)
The Co-operators Group Limited - logo (CNW Group/The Co-operators Group Limited)

"Our strong financial performance is the result of a continued momentum driven by positive underwriting results and the stability of our investments," said Rob Wesseling, CEO of Co-operators. "From this position of capital strength, we can invest in solutions to better serve Canadians in a rapidly changing world, navigate uncertainty in our midst, and continue prioritizing the resilience of our clients and communities."

CO-OPERATORS GENERAL'S THIRD QUARTER FINANCIAL HIGHLIGHTS
($ in millions except for earnings per share and ratios)







3rd quarter

3rd quarter

2021

2020


2021

2020

YTD

YTD

Key financial data





Direct written premium (DWP)

1,109.0

1,076.3

3,076.4

2,921.8

Net earned premium (NEP)

974.7

922.2

2,824.3

2,631.6

Net income

86.8

152.3

469.4

151.3

Total assets1

9,170.6

8,261.6

9,170.6

8,261.6

Shareholders' equity1

2,547.3

2,118.0

2,547.3

2,118.0











Key success indicators





DWP growth

3.0%

7.7%

5.3%

4.1%

NEP growth

5.7%

9.7%

7.3%

9.3%

Underwriting income - excluding market yield adjustment (MYA)

61.1

77.9

396.5

93.9

Earnings per common share

$3.20

$5.67

$17.32

$5.44

Return on equity

16.1%

39.7%

30.5%

11.7%

Combined ratio - excluding MYA

93.7%

91.6%

86.0%

96.5%

Minimum Capital Test (MCT)1

261%

232%

261%

232%

1Balance sheet data and MCT results for 2020 are as at December 31





THIRD QUARTER REVIEW

The third quarter of the year saw DWP increase by 3.0% or $32.7 million compared to the same quarter of 2020 due to higher average premiums in the home and commercial lines of business and an increase in policies in force in the commercial line of business in all regions. NEP increased during the third quarter by 5.7% or $52.5 million compared to the same quarter last year, which was primarily attributable to the auto and home lines of business.

Undiscounted net claims and adjustment expenses increased by $22.2 million compared to the same quarter of 2020, however our loss ratio improved by 1.1 percentage points to 60.5% as NEP growth outpaced the increase in undiscounted net claims and adjustment expenses. The increase in undiscounted net claims and adjustment expense is mainly attributable to higher current year claims activity in the home line of business due to increased major events, and was offset by lower current year claims in commercial and farm lines of business. Our expense ratio of 33.2% increased 3.2 percentage points compared to the third quarter of 2020, as operating expenses grew at a greater rate than NEP as a result of increased strategic initiative spend and staffing costs. Consequently, our combined ratio excluding MYA increased to 93.7% in the quarter, an increase of 2.1 percentage points compared to the same period last year. The discount rate used to measure our claims liabilities increased in the quarter, resulting in a favourable MYA of $2.3 million, compared to an unfavourable MYA of $22.5 million from the same quarter of last year.

During the third quarter, economic recovery and continued vaccine rollout, supported by accommodative fiscal and monetary policies, have resulted in continued gains in equity markets, while rising interest rates drove lower bond valuations. Net investment income and gains of $48.5 million was recognized in the quarter, primarily driven by realized gains on our common share portfolio, interest income on bonds, and dividend income.

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 96.3% of our portfolio considered investment grade and 85.6% 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 261% at September 30, 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. For further information, refer to our third quarter 2021 MD&A or our 2020 Annual Report.

ABOUT CO-OPERATORS GENERAL INSURANCE COMPANY

With assets of more than $9.1 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. The Co-operators is well known for its community involvement and its commitment to sustainability. The 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.

FOR FURTHER INFORMATION, PLEASE CONTACT:

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

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