Northbridge combined ratio down to 90.6%

Northbridge Financial (TSX: NB), the Canadian operations of Fairfax Financial, saw its net earnings decline to $43.3 million ($0.85 per share) for the first quarter of 2004 from $57.5 million ($1.16 per share) for the same period a year earlier and this, despite the company turning in a combined ratio of 90.6% during the quarter, versus 93.7% a year earlier.The company posted an underwriting profit of $28.7 million for the most recent quarter, up from $15.2 million a year earlier. While the loss ratio remained relatively flat at 65.7%, the expense ratio dropped more than 3.5 percentage points to 24.9%.Net written premiums were up 14.7% to $354.1 million for the first quarter of this year, from $308.8 million the year before.Northbridge CEO Byron Messier sees many challenges in the Canadian market, including in personal auto, which represents just 9% of the company’s gross written premiums. “For our part, Northbridge pledges to continue to focus on maintaining underwriting profitability in order to maximize the value of the enterprise for our shareholders,” says Messier. “Our second quarter operating results have contributed to a return on average equity (on a trailing four quarters basis) of 19.1% for our shareholders.”For the first half of 2004, net earnings grew to $75.5 million from $86.5 million at the same points a year earlier. Net written premiums were up to $617.4 million from $547.4 million over the same comparative period, and the company posted an underwriting profit of $48.9 million for the six-month period, up from $25.3 million. During the same period, the company brought its combined ratio down to 91.7% from 94.5%.Northbridge has declared a quarterly dividend of $0.15 per common share, payable on September 30 to common shareholders of record on August 31.