GUELPH,
ON, Feb. 16, 2023 /CNW/ - Co-operators General
Insurance Company (Co-operators General) today announced its
consolidated financial results for the three months and year ended
December 31, 2022.
For the fourth quarter, Co-operators General reported
consolidated net income of $110.0
million, compared to $42.9
million for the same quarter in 2021. Earnings per common
share was $3.90 for the fourth
quarter, compared to $1.42 for the
same period last year. Direct written premium was $1,107.5 million in the quarter, an increase of
$75.7 million as compared to
$1,031.8 million in the same quarter
of 2021.
Net income for the year amounted to $375.7 million, compared to $512.4 million in 2021. This resulted in earnings
per common share of $13.56 compared
to $18.74 in the previous year.
Direct written premium increased by 7.3% to $4,409.0 million, compared to $4,108.3 million in the prior year.
"While we continue to operate in a time of economic uncertainty,
we were able to sustain positive momentum overall and delivered a
profitable quarter across our portfolio," said Rob Wesseling, CEO of Co-operators. "Our
performance has helped our balance sheet and capital position
remain strong and enables us to stay focused on creating value for
our members and clients while continuing to invest in our
communities and programs to drive a more sustainable future for all
Canadians."
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(in millions of
Canadian dollars except ROE, EPS and ratios)
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4th
quarter
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4th quarter
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2022
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2021
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|
2022
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2021
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YTD
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YTD
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Key financial
data
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Direct written
premium (DWP)
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1,107.5
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1,031.8
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4,409.0
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4,108.3
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Net earned
premium (NEP)
|
1,029.0
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965.9
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3,983.6
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3,790.2
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Net
income
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110.0
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42.9
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375.7
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512.4
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Total
assets
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8,969.6
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9,008.5
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8,969.6
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9,008.5
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Shareholders'
equity
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2,355.9
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2,394.8
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2,355.9
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2,394.8
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Key success
indicators
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DWP
growth
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7.3 %
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4.4 %
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7.3 %
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5.1 %
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NEP
growth
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6.5 %
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1.6 %
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5.1 %
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5.8 %
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Underwriting
income - excluding market yield adjustment (MYA)
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54.4
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10.2
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190.9
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406.7
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Earnings per
share (EPS)
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$3.90
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$1.42
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$13.56
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$18.74
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Return on equity
(ROE)
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20.2 %
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8.0 %
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16.7 %
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25.5 %
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Combined ratio -
excluding MYA
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94.7 %
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99.0 %
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95.2 %
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89.2 %
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Combined ratio -
including MYA
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92.8 %
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99.7 %
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91.1 %
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88.7 %
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Minimum Capital
Test (MCT)
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251 %
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239 %
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251 %
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239 %
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Fourth Quarter Review
Fourth quarter DWP increased by 7.3% or $75.7 million compared to the same quarter of
2021, while NEP increased 6.5% or $63.1
million over the same timeframe. DWP and NEP growth over the
comparative quarter was seen across all business lines and regions
but particularly in the home and commercial lines of business. The
increase in home is primarily attributable to higher average
premiums, while the increase in commercial is primarily
attributable to higher policy growth and policies in force.
Our combined ratio, excluding MYA, improved by 4.3 percentage
points to 94.7% compared to 99.0% in the fourth quarter of 2021.
This was primarily driven by an improvement in our loss ratio of
3.1 percentage points to 57.7%. The improvement in our loss ratio
can partly be attributed to the comparative period being impacted
by the catastrophic flooding event in British Columbia combined with NEP growth in
the current quarter. The expense ratio also contributed to the
improvement, largely due to NEP growth outpacing the increase to
expenses.
Net investment income and gains for the fourth quarter was
$51.3 million, an increase of
$6.8 million compared to the same
quarter in the prior year. The increase was primarily driven by
increases in net investment income resulting from higher interest
rates. Unrealized preferred share losses and realized bond losses
partially offset the income increase.
Our balance sheet, liquidity and capital positions remain strong
and enable us to continue to serve and meet the needs of our
clients and members while also supporting our strategic areas of
focus. Our investment portfolio is comprised of high quality and
well diversified assets. The credit quality of our portfolio
remains high with 96.6% of our portfolio considered investment
grade and 83.8% rated A or higher. Our equity portfolio is 84.4%
weighted to Canadian stocks.
Annual Review
DWP for the year increased by 7.3% to $4,409.0 million, compared to $4,108.3 million in 2021. The increase was seen
across all lines of business and geographic regions and was driven
by higher average premiums across all lines of business, and policy
growth in commercial and farm.
NEP increased by $193.4 million or
5.1% to $3,983.6 million as a result
of growth seen across all our geographic regions and all core lines
of business, and particularly in home, commercial and travel. The
growth in travel was largely the result of pandemic restrictions
easing in 2022.
Excluding the MYA, the combined ratio deteriorated by 6.0
percentage points from 89.2% in 2021 to 95.2% in 2022. This was
largely the result of our loss ratio which deteriorated 5.9
percentage points over 2021. The deterioration in the loss ratio
was primarily from catastrophic events, including the windstorm
which swept across Ontario and
Quebec in May of 2022 combined
with Hurricane Fiona in September which impacted Atlantic Canada and parts of Quebec. The loss ratio was also impacted by
increased driving activity as pandemic restrictions were lifted
throughout 2022 leading to higher claims activity. Meanwhile, the
expense ratio remained relatively consistent with the prior year
deteriorating slightly by 0.1 percentage points, due to increasing
operating expenses from strategic initiative spend and higher
staffing costs, partly offset by lower commission and advisor
compensation.
Net investment income and gains decreased by $123.5 million compared to the prior year as a
result of unrealized losses on preferred shares due to
deterioration in preferred share market valuations, combined with
higher realized losses on bonds due to rising interest rates. These
were partially offset by higher investment income when compared to
the prior year also a result of higher interest rates.
Capital
Co-operators General's capital position remains strong, as the
Minimum Capital Test for Co-operators General was 251% at
December 31, 2022, well above
internal and regulatory minimum requirements. We continue to
closely monitor capital levels in response to the changing economic
environment.
Caution Regarding Forward-looking Statements
This document may contain forward-looking statements and
forward-looking information, including statements regarding the
operations, objectives, strategies, financial situation and
performance of Co-operators General. These statements generally can
be identified by the use of forward-looking words such as "may",
"will", "expect", "intend", "estimate", "anticipate", "believe",
"plan", "would", "should", "could", "trend", "predict", "likely",
"potential" or "continue" or the negative thereof and similar
variations. These statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in the forward-looking statements
or information, including the impact of the COVID-19 pandemic on
our investments, operations and claims negatively affecting the
results of our operations and financial position. Although we
believe that the expectations reflected in the forward-looking
statements and information are reasonable, there can be no
assurance that such expectations will prove to be correct.
Consequently, we make no representation that actual results
achieved will be the same in whole or in part as those set out in
the forward-looking statements and information.
About Us
Co-operators General, a leading Canadian multi-product insurance
company, is part of The Co-operators Group Limited (Co-operators).
Co-operators is a leading Canadian financial services co-operative,
offering multi-line insurance and investment products, services,
and personalized advice to help Canadians build their financial
strength and security. Co-operators has more than $58.2 billion in assets under administration.
Co-operators has been providing trusted guidance to Canadians for
the past 76 years. The organization is well known for its community
involvement and its commitment to sustainability. Achieving carbon
neutral equivalency in 2020, the organization is committed to
net-zero emissions in its operations and investments by 2040, and
2050, respectively. Co-operators is also ranked as a Corporate
Knights' Best 50 Corporate Citizen in Canada. For more information, please visit:
www.cooperators.ca.
Co-operators General Class E, Series C Preference Shares trade
under ticker symbol CCS.PR.C on the Toronto Stock Exchange (TSX).
Further information can be found at www.cooperators.ca.
For Further Information, Please Contact:
Investor Relations
Lesley Christodoulou
Vice-President, Corporate Finance Services
Telephone: 1-888-767-3909 Ext: 302493
Email: lesley_christodoulou@cooperators.ca
Media Relations
Email: media@cooperators.ca
SOURCE The Co-operators Group Limited