Optimum General Bounces Back Into the Black

Montreal-based Optimum General Inc. (TSX: OGI.A) was back in the black for the first half of this year, posting net income of $492,000 equal to 4 a share. The company’s net earnings show a vast improvement over the loss of $2 million, or 18c a share, reported for the first six months of 2002.

The insurer’s bottom-line benefited mostly in the second quarter of this year, with a net income clocking in at $783,000, or 7 a share, versus a net loss of $2.3 million, or 21 a share for the second quarter of last year. The company’s gross written premiums fell to $38.0 million for the second quarter of this year (2002 2-Q: $41.9 million) with net earned premiums also coming in lower at $22.7 million (2002 2-Q: $23.6 million). The first six months of this year saw gross written premiums down to $67.6 million (June 2002: $73.5 million), while net earned premiums were up slightly to $47.9 million (June 2002: $47.7 million).

Lower claims costs are largely the cause of the improvement, with the loss ratio hitting 55.5% for second-quarter 2003 versus the 87.9% ratio reported for in the same period in 2002. The first half of this year saw the loss ratio come in at 59.5% compared with the 75.4% ratio shown for the same a year earlier. Overall, the company posted a combined ratio of 99.9% for second-quarter 2003 against the 129.2% ratio reported for second-quarter 2002.