Co-operators General Insurance Company started the year on a low note.
The company reported net income of $132.2 million in the first quarter of 2022, compared with $197.8 million in Q1 2021. This represents a decrease of 33.2 per cent or $65.6 million.
Even so, this result tops those reported by the company during the first quarters of 2010 to 2020, which ranged from a net loss of $48.9 million to a net income of $66.5 million.
Excluding the market yield adjustment, Co-operators General reported underwriting income of $83.6 million in Q1 2022, versus $164.9 million in Q1 2021.
This decrease of 49.3 per cent or $81.3 million was “primarily from an increase in claims and adjustment expenses,” the company says.
Net claims and adjustment expenses climbed 15.1 per cent or $65 million from $429 million in Q1 2021 to $494 million in Q1 2022.
The insurer pins this increase on “higher unfavourable claims development in the
auto and home lines of business, combined with higher general expenses driven by higher strategic initiative spend and staffing cost.”
As a result, the company’s combined ratio worsened by 9.4 points. The combined ratio was 91.3 per cent in the first quarter of 2022, up from 81.9 per cent in Q1 2021.
Co-operators General reported direct written premiums (DWP) of $906 million in the first quarter of 2022, compared with $840.6 million in Q1 2021.
DWP thus increased by 7.8 per cent or $65.4 million, owing to “an increase in policies in force in the travel and other line of business, higher average premiums in the commercial and home lines of business, and an increase in policies in force in the commercial line of business across all regions.”
Net earned premium (NEP) was $961.5 million in Q1 2022 compared with $912 million in Q1 2021.
This increase of 5.4 per cent or $49.5 million “was primarily attributable to the commercial and home lines of business.”
Co-operators General recognized net investment income and gains of $19.9 million in Q1 2022, compared with $64.5 million in Q1 2021.
This plunge of 69.1 per cent or $44.6 million “was primarily driven by unrealized losses on our preferred share portfolio, compared to unrealized gains in the same quarter of the prior year.”
“Despite ongoing global and market uncertainty, coupled with increased claims activity this quarter, our continued financial stability is a testament to the resilience of our co-operative, and our ability to protect the financial security of our clients, members and communities," says Rob Wesseling, President and CEO of Co-operators Group Limited, the co-operative that owns The Co-operators group of companies.