Desjardins Group has reported an improvement in its insurance business in the fourth quarter and for fiscal 2023.
When the net 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 $574 million for the fourth quarter of 2023.
For the same period in 2022, these two segments contributed some $223 million to the cooperative movement's net surplus earnings. Amounts for 2022 have been restated to reflect changes in International Financial Reporting Standards (IFRS).
For the full year, the two insurance business segments saw surplus earnings of $1.1 billion, compared with $278 million in 2022. This is a year-on-year increase of $797 million or 286 per cent.
Property & casualty insurance
In the fourth quarter of 2023, property & casualty insurance net surplus earnings were $360 million, compared with a surplus of $104 million for the same period in 2022 on an adjusted basis.
For fiscal 2023, property & casualty insurance net surplus earnings were $494 million, compared with a net deficit of $35 million in 2022.
For fiscal 2023, direct written premiums totalled $6.9 billion, up 10 per cent over the $6.2 billion reported in 2022 on an adjusted basis.
Net income from insurance activities was $581 million in the fourth quarter of 2023, compared with $223 million reported for the same quarter of 2022 on an adjusted basis.
For fiscal 2023, net income reached $1 billion, compared with $258 million in 2022 on an adjusted basis.
Desjardins attributes this result to premium growth in property and automobile insurance. Notable, however, is the increase in claims-related expenses for 2023 in automobile insurance, linked to inflation for repair costs and the rise in vehicle theft.
Direct written premiums in this segment totalled $1.6 billion in the fourth quarter, compared with $1.5 billion in the same quarter of 2022 on an adjusted basis. This is an increase of $154 million or 10 per cent.
Wealth management and life and health insurance
The Wealth Management and Life and Health Insurance segment posted net surplus earnings of $224 million in the fourth quarter of 2023, compared with net surplus earnings of $119 million for the same period in 2022 on an adjusted basis.
For fiscal 2023, this segment posted net surplus earnings of $581 million, compared with $313 million in 2022 on an adjusted basis.
Desjardins attributes this result "to an overall more favourable experience, including the long-term disability component in group insurance, which performed well for a second consecutive year. The increase was partly offset by the unfavourable effect of updating actuarial assumptions.”
Desjardins also highlights the increase in other income in this sector, estimated at $585 million, of which $409 million relates to the activities acquired from IDC Worldsource. Expenses of $416 million were related to this acquisition.
Claims experience
In property & casualty insurance, the claims ratio was 67.7 per cent in 2023, compared with 67.5 per cent for the same period in 2022 on an adjusted basis.
The combined ratio was 93 per cent in 2023, compared with 97.4 per cent in 2022 on an adjusted basis. Desjardins did not provide specific data on claims experience for the fourth quarter.
The claims ratio for catastrophes and major events was 3.6 per cent in 2023, compared with 3.9 per cent in 2022.
For all activities, Desjardins reported surplus earnings before member dividends of $750 million in the fourth quarter of 2023 and $2.3 billion for the full year. Compared to the adjusted amounts for 2022, this is an increase of 64 per cent for the fourth quarter and 82 per cent for the full year, respectively.
As of Dec. 31, 2023, Desjardins' total assets stood at $423 billion, up 4.7 per cent from the $404 billion reported a year earlier.
