Optimum General net rises on underwriting gains

Montreal-based Optimum General Inc. (TSX: OGI.A) saw its net income more than double for the second quarter ending June 30, 2004 to $2.21 million ($0.19 per share), up from $783,000 ($0.07 per share) in the same quarter last year.Much of this growth came as a result of strong underwriting, with Optimum dragging its combined ratio down to 90.6% from 99.9% during the same comparative period. For the second quarter of this year, the company produced an underwriting profit of $2.3 million, versus just $15,000 a year earlier. This helped offset a drop in investment income over the same comparative period down to $974,000 from $1.1 million.Gross written premiums for the second quarter of this year were down slightly to $37.6 million from $38 million the year prior, but over the same period net earned premiums were up to $24.6 million from $22.7 million.The company managed to drag its expenses down, to $22.3 million for the second quarter of 2004 from $22.7 million a year earlier, and the claims ratio also dropped to 44.8% from 55.5% over the same period.For the first half of 2004, the company produced net income of $2.47 million ($0.21 per share) versus $492,000 ($0.04 per share) in the first half of 2003. At the same time, the combined ratio fell to 96.8% (first half 2003: 103.1%), and the company’s underwriting profit grew to $1.6 million from a first-half underwriting loss of $1.5 million in 2003.”These good results confirm the soundness of the strategy implemented over the past few years and encourage us to continue our efforts to improve them,” says Optimum General COO and president David Liddle.