Definity Financial Corporation faltered in early 2022.
The company, which includes Economical Insurance, Sonnet Insurance, Petline Insurance Company and Family Insurance Solutions, reported net income of $48.3 million in the first quarter of 2022, a sharp drop from $82.4 million in Q1 2021.
The financial markets hammered the firm’s income, triggering a plunge of 41.4 per cent or $34.1 million.
Definity reported a combined ratio of 92.2 per cent in the first quarter of 2022, versus 91.3 per cent in Q1 2021. The ratio thus worsened by 0.9 points. It was “bolstered by strength in commercial insurance and personal property, while results also reflect higher claims frequency and severity in personal auto than Q1 2021,” the insurer says.
Definity reported underwriting income of $60.2 million in Q1 2022, up from $58 million in Q1 2021. This amounts to an increase of 3.8 per cent or $2.2 million.
Definity's gross written premiums rose to $742.5 million in the first quarter of 2022, compared with $658.7 million in Q1 2021. The 12.7 per cent or $83.8 million growth was “driven by strong growth in Sonnet, commercial lines, personal property, and ongoing firm market conditions,” the company says.
Looking at the results in closer detail:
- In commercial insurance, gross written premiums were $219.9 million in the first quarter of 2022, up from $184.8 million in Q1 2021. This 19 per cent or $35.1 million advance reflects “increases in both our broker and direct businesses,” Definity says.
- In personal insurance, gross written premiums were $522.6 million in Q1 2022 compared with $473.9 million in Q1 2021. This increase of 10.3 per cent or $48.7 million reflects Definity’s “expanded underwriting capabilities and focus on growth in this line of business.”