At the end of the second quarter of 2016, Desjardins Group recorded an increase of $85 million in its operating income, which reached $3.51 billion. As for surplus earnings before member dividends, they reached $427 million; this is down $202 million compared to the same quarter of 2015 (-32%).
“We’re satisfied with these results, particularly given that the results from the same period last year benefited from specific items and were much higher than previous quarters,” says Desjardins president and CEO Guy Cormier. “Lastly, I am thrilled to see that Desjardins is one of the 20 most influential brands in Canada, compelling evidence of our growth and rising profile across the country.”
Insurance profits down by 75%
In property and casualty insurance, Desjardins' net surplus came to $49 million, down from the $194 million reported in the corresponding quarter of 2015. Desjardins explains that this 75% decrease is the result of higher losses in Ontario auto insurance and the costs related to the Fort McMurray wildfires, which are estimated at $30 million. In addition, the surplus recorded in the second quarter of 2015 was higher due to a particularly low level of claims, mainly attributable to State Farm's Canadian operations. For the first six months of 2016, this division's surplus was $88 million, compared to $270 million in 2015.
Surplus in life insurance drops by 36%
In the area of wealth management and personal life insurance, the net surplus in the second quarter of 2016 reached $124 million, down 36% ($195 million) compared to the same period in 2015. According to the cooperative, this decrease is mainly due to adjustments made in 2015 that dealt with actuarial assumptions on State Farm's Canadian life insurance operations. Gains on disposal of real estate investments also made a positive contribution to the organisation's results in the second quarter of 2015. For the first six months of 2016, this division's surplus amounted to $221 million, down from the $293 million reported in 2015.
