Desjardins Group reported a marked improvement in its insurance business in the first quarter of 2024, compared with the same period in 2023.

When the surplus earnings of the property and casualty insurance segment are added to those of the wealth management and life and health insurance segments, they total $449 million for the first quarter of 2024.

In the same quarter of 2023, these two segments posted surplus earnings of only $67 million. This represents an increase of 616% over the 12-month period.

Property and casualty insurance  

In the first quarter of 2024, property and casualty insurance posted surplus earnings of $280 million, compared with a deficit of $25 million for the same period in 2023.

Total net insurance service income in the property and casualty insurance segment was $449 million in the first quarter of 2024, compared with $54 million in the same period of 2023.

Desjardins attributes this result to higher insurance revenue in property and automobile insurance, and lower claims expenses. The lower claims frequency is linked to milder weather conditions.

Direct written premiums in this segment totalled $1.6 billion in the first quarter of 2024, up $116 million or 8% compared to the same quarter last year.

Wealth management and life and health insurance  

In the Wealth Management and Life and Health Insurance segment, surplus earnings totalled $169 million in the first quarter of 2024, compared with $92 million in the same quarter of 2023.

Desjardins Group attributes this result to favourable developments in equity markets and the positive impact of asset-liability management resulting from interest-rate fluctuations. However, this increase “was offset by a decrease in insurance activities as a result of a less favourable experience, partly offset by business growth,” explained the cooperative, noting “that the group insurance experience was particularly favourable in the first quarter of 2023, including in long-term disability.” 

As in the previous quarter, Desjardins also noted an increase in other income in this sector, estimated at $155 million, of which $119 million stemmed from the acquisition of IDC Worldsource. Expenses of $120 million were incurred in connection with this transaction.

Year-over-year growth in group insurance premiums reached 7% in the first quarter of 2024, notes the financial cooperative in its management report.

Annuity premiums were also well up, thanks to the addition of two major group retirement savings groups. This volume reached $356 million in the first quarter of 2024, compared with $126 million for the same period a year earlier.

Claims experience 

In property and casualty insurance, the claims ratio was 62.8% in the first quarter of 2024, compared with 80.8% for the same period in 2023. The claims ratio for catastrophes and major events was not disclosed.

The claims expense ratio also fell in the first quarter, to 25.5%, compared with 27% in the same quarter of 2023. As a result, the combined ratio was 88.9% for the first three months of 2024, compared with 108.3% for the same period in 2023.

As at March 31, 2024, Desjardins' total assets stood at $436 billion, up 9.3% from the $399 billion reported a year earlier.

Governance  

At the annual general meeting in March, delegates from Desjardins caisses in Québec and Desjardins Ontario Credit Union voted to separate the roles of chair of the board of directors from the role of president and CEO of Desjardins Group. These roles had been merged for close to 30 years.

Guy Cormier held both roles from March 2016 to March 2024. As of March 23, he has continued to act as president and CEO, a role he can hold until March 2026 at the latest.

On May 16, Desjardins announced the election of Louis Babineau as Chair of the Board. 

Babineau has been a member of the Desjardins Group Board of Directors since 2016 and has served as Chair of the Board of Desjardins General Insurance Group since 2021. A professor at Université de Québec à Rimouski, he holds a PhD in business administration, as well as two master's degrees. 

Other highlights of the first quarter of 2024 include Desjardins' acquisition of 100% of the shares of the Insurance Company of Prince Edward Island (ICPEI), announced on March 27.

The transaction, which is subject to regulatory approvals, is scheduled to close by the end of the third quarter of 2024.