This quarterly earnings news release should be read in conjunction with our First Quarter 2012 consolidated financial statements and Management's Discussion and Analysis (MD&A) as well as our 2011 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.
GUELPH, ON, May 3, 2012 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended March 31, 2012. Consolidated net income was $66.5 million compared to $25.8 million for the same quarter in 2011. This resulted in earnings per common share of $3.11 for the quarter compared to $1.11 in the same period last year.
"Earnings in the first quarter were positively impacted by favourable claims results from the Ontario auto insurance market and the mild winter which reduced the number of weather related claims," said Kathy Bardswick, President and Chief Executive Officer of The Co-operators. "We are pleased with our core client growth in our operations. In addition, net earned premium grew by 5.2% compared to last year across all lines of business and in every region. Loss ratios were also lower in all lines of business and our capital position remains strong."
CO-OPERATORS GENERAL'S FIRST QUARTER FINANCIAL HIGHLIGHTS
| ($ in millions, except for earnings per share and ratios) | ||
| 1st quarter | 1st quarter | |
| 2012 | 2011 | |
| Key financial data | ||
| Direct written premium (DWP) | 493.6 | 478.6 |
| Net earned premium (NEP) | 556.8 | 529.1 |
| Net income | 66.5 | 25.8 |
| Total assets1 | 5,186.8 | 5,292.8 |
| Shareholders' equity1 | 1,595.5 | 1,524.2 |
| Key success indicators | ||
| DWP growth | 3.1% | 0.2% |
| NEP growth | 5.2% | 3.6% |
| Earnings per share | $3.11 | $1.11 |
| Annualized return on average equity | 18.7% | 8.1% |
| Combined ratio - excluding MYA | 92.3% | 103.4% |
| Minimum Capital Test (MCT)1 | 272% | 259% |
| 1 Balance sheet data and MCT results for 2011 and 2010 are as at December 31 |
First quarter review
First quarter DWP increased by 3.1% to $493.6 million, compared to $478.6 million in the first quarter of 2011. This increase relates to new business, rate and inflation adjustments in certain lines of business and increased participation of the Ontario risk sharing pool.
Net investment income, which is comprised of interest and dividends less investment expenses, increased by $4.5 million versus the first quarter of prior year. This is attributable to net realized gains which increased $3.3 million over the same period last year, achieved by capitalizing on the volatile stock markets.
The combined ratio, excluding the market yield adjustment (MYA) for the quarter was 92.3%, which is a significant improvement from 103.4% during the comparable period last year. Net claims and adjustment expenses have decreased by 11.5% from the first quarter 2011, bringing the loss ratio to 56.8%, excluding MYA for the first quarter. This is the outcome of favourable claims development and fewer accident year claims due to mild winter weather conditions. This was partially offset by commercial property claims and large loss claims from the Atlantic region. The expense ratio has decreased by 0.3 percentage points caused by net earned premium growth which offset increased general expenses and net commissions and agent compensation costs.
Our portfolio composition is conservative and is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 92.2% of our bonds rated A or higher. Our equity portfolio is 83.1% weighted to Canadian stocks.
Capital
The Company's capital position remains strong, as the Minimum Capital Test (MCT) for Co-operators General Insurance Company was 272% at March 31, 2012, well above the regulatory minimum requirement of 150%.
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 Insurance Company. 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. 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 2012 MD&A or our 2011 Annual Report.
SHAREHOLDER AND INVESTOR INFORMATION
About Co-operators General Insurance Company
With assets of more than $5.1 billion, Co-operators General is a leading Canadian-owned multi-product insurance company. Co-operators General is part of The Co-operators Group Ltd. (CGL), a Canadian-owned 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 #1 among the 50 Best Corporate Citizens in Canada by Corporate Knights, and listed among the 50 Best Employers in Canada.
Co-operators General Class E, Series C Preference Shares trade under ticker symbol CCS.PR.C and the Class E Series D Preference Shares trade under ticker symbol CCS.PR.D. Both series of shares trade on the Toronto Stock Exchange (TSX). Further information can be found at www.cooperators.ca.
P. Bruce West
Executive Vice-President, Finance and Chief Financial Officer
Telephone: (519) 767-3036
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