Co-operators earnings rise on strong underwriting gain

Co-operators General Insurance Co. (TSX: CCS.PR.A) saw its net income rise to $38.0 million ($1.74 per share) for the second quarter ending June 30, 2044, on the back of 5% improvement in the company’s combined ratio. Co-operators posted a combined ratio of 92.8% for the quarter, compared to 97.8% a year previous, when net income was $25.3 million ($1.12 per share).Gross written premiums (GWP) were up to $572.9 million, an increase of 5.2% over the $544.8 million posted in second quarter 2003. At the same time net earned premiums (NPE) grew to $423.7 million from $381.4 million.Claims were down over the same comparative period, with the claims ratio coming in at 63.7% for the most recent quarter, compared to 70.7% the year prior. However, investment income dropped 11% over the same comparative period, to $27.3 million from $30.7 million.The Co-operators CEO Kathy Bardswick was encouraged by the company’s 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, net income was $72.4 million ($3.40 per share), a vast improvement over the $19.4 million ($0.76) posted in the first six months of 2003. GWP was up to $972.5 million from $922.3 million, and NPE was up $845.4 million from $742.6 million over the same comparative period.For the first six months of 2004, the company’s combined ratio improved to 94.6% from 105.0% the year prior.