This quarterly earnings news release should be read in conjunction with our First Quarter 2013 condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2012 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.
GUELPH, ON, April 25, 2013 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended March 31, 2013. Consolidated net income was $58.1 million compared to $66.5 million for the same quarter in 2012. This resulted in earnings per common share of $2.69 for the quarter compared to $3.11 in the same period last year.
"We are pleased with our first quarter results, and with the client growth we experienced in our core product lines," said Kathy Bardswick, president and CEO of The Co-operators. "Net income was down $8.4 million compared to the same period last year, during which we benefitted from unusually mild winter weather. Winter weather returned this year, but our results remained strong as the company earned net income of $58.1 million and maintained a strong and stable balance sheet."
CO-OPERATORS GENERAL'S FIRST QUARTER FINANCIAL HIGHLIGHTS
| ($ in millions, except for earnings per share and ratios) | ||||
| 1st quarter | 1st quarter | |||
| 2013 | 2012 | |||
| Key financial data | ||||
| Direct written premium (DWP) | 447.2 | 439.1 | ||
| Net earned premium (NEP) | 500.1 | 488.5 | ||
| Net income | 58.1 | 66.5 | ||
| Total assets1 | 4,838.9 | 4,910.3 | ||
| Shareholders' equity1 | 1,480.2 | 1,418.4 | ||
| Key success indicators | ||||
| DWP growth | 1.8% | 4.0% | ||
| NEP growth | 2.4% | 5.1% | ||
| Earnings per share | $2.69 | $3.11 | ||
| Annualized return on average equity | 17.5% | 18.7% | ||
| Combined ratio - excluding MYA | 95.4% | 91.3% | ||
| Minimum Capital Test (MCT)1 | 263% | 260% | ||
| 1Balance sheet data and MCT results for 2012 are as at December 31 |
First quarter review
DWP in the first quarter has increased by 1.8% or $8.1 million to $447.2 million compared to the same quarter last year. DWP improvements are attributable to vehicle and policy count growth mainly in the auto and commercial lines of business. NEP has increased during the first quarter by 2.4% or $11.6 million compared to the same period last year. NEP increased in all of our core lines of business and across all regions of the country.
Net investment income and gains increased by $0.1 million versus the first quarter of 2012. This is attributable to more realized gains and less impairment losses, which offset lower interest income and the negative change in fair value over the same period last year.
The combined ratio, excluding the market yield adjustment (MYA) for the quarter was 95.4% compared to 91.3% for the comparable period last year. Undiscounted net claims and adjustment expenses have increased by 11.8% from the first quarter 2012, bringing the loss ratio to 61.0%, excluding MYA for the first quarter. This is the outcome of more accident year claims and unfavourable claims development. Unfavourable claims development in the first quarter of 2012 was unusually low; the first quarter of 2013 reflected more characteristic levels. The expense ratio decreased 1.0 percentage point to 34.4%, compared to 35.4% for the same period in 2012. Our expense ratio has improved due to our continued focus on holding expenses while growing premium.
Our portfolio composition is conservative and is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 92.7% of our bonds rated A or higher. Our equity portfolio is 81.7% 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 263% at March 31, 2013, 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 2013 MD&A or our 2012 Annual Report.
SHAREHOLDER AND INVESTOR INFORMATION
About Co-operators General Insurance Company
With assets of more than $4.8 billion, Co-operators General is a leading Canadian-owned multi-product insurance company. Co-operators General is part of The Co-operators Group Limited, 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, and is 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.
SOURCE: The Co-operators
P. Bruce West
Executive Vice-President, Finance and Chief Financial Officer
Telephone: (519) 767-3036
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