Optimum General records sixth successive quarter of profit

Continuing its financial turnaround, Montreal-based Optimum General Inc. (TSX: OGI.SV.A) is reporting its sixth consecutive quarter of profit for the third quarter ending September 30, 2004.The insurer produced net income of $742,000 ($0.06 per share) for the quarter, up from income of $411,000 ($0.04 per share) in the same quarter a year ago. Over the same comparative period, the company’s combined ratio rose only slightly to 102.9% from 102.7%, but the underwriting loss grew to $704,000 from $630,000. The claims ratio was relatively stable at 59.2%, while the expense ratio jumped just 0.2% to 43.7%. Gross written premiums dropped to $36.1 million from $39.4 million, but net earned premiums rose to $24.8 million from $23.5 million as rate increases and withdrawal from unprofitable markets earned through.And investments paid off with investment income rising to $1.6 million in third quarter of 2004 versus $1.3 million a year earlier.For the first nine months of 2004, the company produced net income of $3.2 million, a vast improvement over the income of $903,000 produced during the same period in 2003.The company produced underwriting income of $900,000 on a combined ratio of 98.8% for the first three quarters of 2004, versus an underwriting loss of $2.1 million on a combined ratio of 103.0% a year earlier. The claims ratio dropped to 55.2% year-to-date in 2004, versus 59.4% the year prior. And the expense ratio held firm at 43.6%.Gross written premiums were down to $104.7 million from $107.0 million over the same comparative period, while net earned premiums rose to $74.8 million from $71.4 million year-on-year.2004 year-to-date investment income was $3.5 million, just up from the $3.4 million produced in the first nine months of 2003.Optimum General president David Liddle notes, “We were pleased to have this performance recognized by the A.M. Best rating agency, which upgraded the rating for three of our subsidiaries during the quarter.”