Co-operators reports income jump, claims improvement

Guelph, Ontario-based Co-operators General Insurance Co. (TSX: CCS.PR.A) is reporting solid net income of $10.93 million, or $0.48 per share, for the third quarter ending September 30, 2003, a turnaround from the net loss of $3.4 million, or $0.23 per share, reported for the same period a year earlier. Net income on a year-to-date basis is also up, to $30.3 million, or $1.23 per share, from $1.4 million, representing a loss of $0.21 per share, a year ago.Gross written premiums were up in the third quarter 2003 to $528 million, a 10% jump over last year’s third quarter. But claims saw the greater improvement, with the company posting a loss ratio of 74.3% for the most recent quarter versus 80.9% a year earlier. The combined ratio dropped to 102.5% from 109% during the same comparative period.For the first nine months of 2003, the company had gross written premiums of $1.45 billion, up 12.5 % over last year’s tally of $1.29 billion at the nine-month mark. Net earned premiums were up 13.6% during the same period, to $1.15 billion from $1.01 billion. This is despite a drop in investment income to $93.5 million for the first nine months of this year, from $94.5 million last year.But the company is not ready to celebrate just yet. “Our year-to-date results represent a very modest return on equity of 4.7%,” notes Co-operators General president and CEO Kathy Bardswick. “Profitability of the auto insurance product remains a serious concern in all provinces except Quebec; however we remain hopeful that solid reforms will soon benefit both consumers and the industry.”