Rate hikes pay off for Co-operators

Co-operators General Insurance Co. (TSX: CCS.PR.A) says premium increases is starting to show results in bottom-line profitability. For the second quarter ending June 30, 2003, the company reports after-tax net income of $25.3 million, versus net income of $7 million in second-quarter 2002. This brings year-to-date net income up to $19.4 million, compared to $4.7 million in first-half 2002.Earnings per share for the period are $1.12, against $0.20 in second-quarter last year. For the half-year, earnings per share are $0.76, versus $0.02 in first-half 2002.Gross written premiums were up 15.1% for the quarter, to $545 million, against $473 million in second-quarter 2002. For the half-year, GWP is $922 million, a 14% increase over first-half 2002’s $809 million.Earned premiums were up to $381 million during the most recent quarter, versus $333 million a year earlier. And year-to-date earned premiums are $743 million, compared to $664 million in first-half 2002.The company achieved a claims ratio of 70.7% in second-quarter 2003, versus 79.2% a year earlier. And the combined ratio was brought under the “magic 100%” at 97.8%, compared to 108.1% in the second quarter last year.The only sour note was investment income, which dropped slightly during the first half of this year to $65.1 million, versus $66.3 million in first-half 2002.”We are pleased with our results in the second quarter of 2003. It signals the beginning of our recovery with a return to acceptable profit levels and adequate rates,” says Kathy Bardswick, president and CEO of The Co-operators.