Co-operators General Insurance Company reported consolidated net income of $98.5 million for the fourth quarter of 2023.

For the same period of 2022, the insurer reported net income of $161.4 million on an IFRS 17-adjusted basis. This is a decline of 39 per cent when comparing the same quarterly data.

For the full year, net income was $151.4 million in 2023, compared with $255.9 million in 2022 on an adjusted basis. This is a decline of 41 per cent. 

Co-operators President and CEO Rob Wesseling stated, "Continued negative trends in increased claims and inflation have led to an underwriting loss in the year which has been mitigated by strong premium growth. Positive investment results have supported us in keeping our strong capital position..." 

These difficulties are reflected in the insurance results, with an underwriting loss of $46.3 million, compared with a surplus of $27.9 million for the same quarter of 2022.

For the full year 2023, the underwriting loss stood at $184.9 million. For 2022 as a whole, the underwriting result was a surplus of $171.3 million. This is a difference of $356.2 million.

Combined ratio  

In terms of claims experience, Co-operators' combined ratio for the fourth quarter of 2023 stood at 104 per cent, compared with 97.3 per cent for the same period of 2022 on an IFRS 17-adjusted basis. This result excludes discounting and risk adjustment.

For the full year 2023, the combined ratio was 104.4 per cent, compared with 95.6 per cent in 2022. This is an increase of 8.8 percentage points. 

The loss ratio, excluding discounting and risk adjustment, thus deteriorated by 12.8 points to 70.6 per cent in the last quarter. It stood at 57.8 per cent in the fourth quarter of 2022. For the full year 2023, the ratio was 71.7 per cent, up 10.2 points over the previous year.

“The unfavourable change is driven by higher current accident year claims, unfavourable claims development and reserve strengthening, the company stated in its press release.”  

For the year, the rise in net claims and undiscounted claims expenses was driven by an increase in claims, unfavorable claims developments in auto, home and commercial lines insurance, particularly in Ontario. There was also higher major event activity in the home line of business, particularly in the West region.

Direct premiums 

Direct written premiums (DWP) for the fourth quarter of 2023 totalled $1.3 billion, up $154 million or 14 per cent over the adjusted amount of $1.1 billion for the final quarter of 2022.

This growth in premiums was observed across all lines of business and regions, but particularly in auto and commercial lines.

For the full year 2023, DWP totaled $4.9 billion, up $491 million or 11 per cent from $4.4 billion in fiscal 2022 on an adjusted basis. 

The company's management report states that Ontario remains the most important market for the insurer, with 50 per cent of DWP for fiscal 2023, compared with 35 per cent for the four Western provinces, 9 per cent for the Atlantic provinces and 6 per cent for Quebec.

Net insurance revenue rose by 7.5 per cent in 2023 in Ontario. In Quebec, net insurance revenue rose by 12.5 per cent in 2023. In Western Canada, net insurance revenue rose by 7.9 per cent, and by 8.6 per cent in the Maritime provinces.

Investment income  

Co-operators General posted net investment income and profits of $196.1 million in the last quarter of 2023, compared with $82 million in the final quarter of 2022. The company attributes this result in particular to unrealized gains in the common stock and bond portfolios.

For the full year 2023, net investment income amounted to $345.1 million. This compares with an adjusted loss of $107.3 million in 2022. This growth was underpinned by the stabilization of interest rates and subsequent strengthening of market valuations. The company also highlighted that it experienced higher interest incomes.