Economical Insurance announced its consolidated financial results for the third quarter and first nine-months of 2020. The company says its underwriting results were strong during the quarter, marking the ninth consecutive quarter of year-over-year improvement.
Net income increased to $45.6-million during the quarter, up significantly compared to a net loss of $7.6-million reported in the third quarter of 2019. Economical says improved underwriting performance was the primary driver. Year-to-date net income increased by $76.6-million to $87.2-million, up from $10.6-million reported for the nine months ended Sept. 30, 2019.
Gains driven by new business
Gross written premiums increased by $79.2 million or 11.7 per cent during the third quarter of 2020 compared to the third quarter of 2019. Gross written premiums reached $753.9-million, up from $674.7-million reported during the same quarter in 2019. The company says the gains were driven by new business, and rate increases that were implemented in 2019 across the business. These were partially offset by customer relief actions related to COVID-19.
Broken down, personal auto premiums increased 3.6 per cent in the quarter, personal property premiums increased 20 per cent, commercial lines premiums increased 21.8 per cent, commercial auto premiums increased 32.2 per cent and commercial property and liability premiums increased 15.1 per cent in the quarter.
Underwriting income up
Underwriting activity during the quarter produced underwriting income of $39.1 million and a combined ratio of 93.9 per cent, compared to an underwriting loss of $36.8-million and a combined ratio of 106.2 per cent in the same quarter a year ago.
The company adds that its capital position remains well in excess of both minimum internal capital and external regulatory requirements as of Sept. 20, 2020. Total equity exceeded $1.7-billion. The company’s minimum capital test ratio was 253 per cent.