Optimum General sees 1-Q earnings boon (May 12, 2005)

Quebec-based Optimum General Inc. (TSX: OGI.SV.A) lifted net income for the first quarter of this year by more than four times to $1.1 million compared with $259,000 reported for the same period in 2004. This equates to earnings for the latest reporting period of 9c a share versus the 2c a share made for the first quarter of last year.The insurer’s significantly improved earnings for the first quarter of 2005 was largely driven by an underwriting profit of $227,000 versus the underwriting loss of $690,000 disclosed for the same period last year. As a result, the company’s combined ratio fell to 99.1% for the latest quarter from the previous year’s 102.8%.Optimum’s investment income for the first quarter of this year rose by 28% year-on-year to $1.2 million (2004 1-Q: $935,000). The insurer’s direct written premiums decreased by 7.5% for the latest reporting period to $28.6 million versus the $30.9 million reported a year ago. Net earned premiums for the latest quarter reflect a decline of 4% to $24.3 million from the $25.3 million shown for 2004’s first quarter. "We are pleased to see positive results for the first quarter [2005], which is traditionally a difficult quarter for the [insurance] industry. It is encouraging to have had eight consecutive quarters of profit and to see a continuation of the downward trend in our loss ratio," says Jean-Claude Page, president of Optimum.