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: [email protected]
Media Relations
Email: [email protected]
SOURCE The Co-operators Group Limited
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