Co-operators General Insurance Company (Co-operators General) has rebounded after four consecutive negative quarters.
The company reported net income of $92.9 million in the third quarter of 2022, up from $86.8 million in Q3 2021. This represents an increase of 7 per cent or $6.1 million.
Excluding the market yield adjustment, Co-operators General reported underwriting income of $21.3 million in Q3 2022, compared with $61.1 million in Q3 2021.
This decrease of 65.1 per cent or $39.8 million “was primarily from increased claims, particularly in the auto, home and farm lines of business, resulting from Hurricane
Fiona which swept across the Atlantic provinces and parts of Quebec near the end of the current quarter.”
“This catastrophic event reduced net income before taxes by $56.0 million, net of reinsurance,” Co-operators General adds.
Net claims and adjustment expenses were up 8.9 per cent or $52.5 million, from $587.7 million in the third quarter of 2021 to $640.2 million in Q3 2022, largely due to Hurricane Fiona, the insurer points out.
In addition, the company's combined ratio deteriorated by 4.2 points “due to the impact of Hurricane Fiona.” The combined ratio was 97.9 per cent in the third quarter of 2022, up from 93.7 per cent in Q3 2021.
“Hurricane Fiona had a devastating impact on our clients and we are working diligently to support them. The affordability of insurance and access to adequate protection will continue to be an issue as climate change impacts increase in frequency and severity. As this gap widens, we need to focus on prevention as well as protection,” Rob Wesseling, CEO of Co-operators, commented in the release announcing the quarterly results.
Co-operators General reported direct written premiums (DWP) of $1.2 billion in the third quarter of 2022, up from $1.1 billion in Q3 2021.
This 6.8 per cent or $75 million growth is “due to increases in policies in force in the auto and commercial lines of business, combined with higher average premiums in the commercial, home, and farm lines of business.”
“Travel DWP has also rebounded as the result of easing of pandemic restrictions worldwide,” the insurer adds.
Gross written premiums were $1.2 billion in the third quarter of 2022, compared with $1.1 billion in Q3 2021. They thus climbed 6.8 per cent or $76.1 million.
Net earned premiums were $1 billion in Q3 2022, versus $974.7 million in Q3 2021. This represents an increase of 4.5 per cent or $44 million.
Co-operators General reported net investment income and gains of $79.5 million in the third quarter of 2022, compared with $48.5 million in Q3 2021.
This increase of 63.9 per cent or $31 million “was primarily driven by realized gains on common equities and higher interest income. Higher unrealized preferred share losses and unfavourable foreign exchange rates partially offset the gain.”