Co-Operators 2-Q Earnings Rise on Underwriting Gain

Co-operators General Insurance Co. (TSX: CCS.PR.A) saw its net income rise to $38 million ($1.74 a share) for the second quarter ending June 2004 on the back of a 5% reduction in the company’s combined ratio. Co-operators posted a combined ratio of 92.8% for the second quarter of this year compared with the 97.8% ratio reported a year ago.

The insurer’s gross written premiums (GWP) for the latest reporting period rose to $572.9 million, reflecting an annual increase of 5.2% over the $544.8 million produced for the second quarter 2003. Net earned premiums over the same period grew to $423.7 million from $381.4 million.

The Co-operators’ claims costs for the second quarter of this year dropped to 63.7% compared with the 70.7% ratio reported a year ago. However, the company’s investment income also fell by 11% year-on-year to $27.3 million (2-Q 2003: $30.7 million). The insurer’s CEO Kathy Bardswick says she is encouraged by the company’s latest performance. “The company has now shown progress in five consecutive quarters over the dismal results experienced in 2001 and 2002. Our two most recent agency ratings reviews have resulted in removal of the negative trend on the rating for the company which reflects our improved financial performance.”

For the first half of 2004, Co-operator’s net income clocked in at $72.4 million, equal to $3.40 a share, reflecting significant improvement on the $19.4 million, or 76 a share reported for the first half of 2003. Gross written premiums came in at $972.5 million for the latest six month period against the $922.3 million reported a year prior. Net written premiums clocked in at $845.4 million for the first half of this year compared with the $742.6 million shown at the end of the same period last year. The insurer’s combined ratio for the first six months of this year also shows vast improvement at 94.6% from the 105.0% ratio reported a year ago.