As a result of new accounting standards for insurance
contracts (IFRS 17) and financial instruments (IFRS 9) being
applied for the first time in the current fiscal year, 2023 results
have been presented under the new standards and 2022 results have
been restated where possible. This quarterly earnings news release
should be read in conjunction with our third quarter 2023 unaudited
condensed consolidated interim financial statements and
management's discussion and analysis (MD&A), which include more
information on the new accounting standards and the resulting
changes, as well as our 2022 Annual Report which are all available
on SEDAR at www.sedarplus.ca. Unless otherwise noted, all amounts
are expressed in Canadian dollars.
GUELPH,
ON, Nov. 2, 2023 /CNW/ - Co-operators General
Insurance Company (Co-operators General) today released
consolidated financial results for the three months ended
September 30, 2023. The consolidated
net loss after tax was $0.2 million
compared to a net income of $73.9
million for the same quarter in 2022. This resulted in
losses per common share of $0.05 for
the quarter, compared to earnings per common share of $2.71 in the same period last year.
"The insurance industry experienced significant challenges in
2023 related to increasing claims inflation, volatility in the
markets, and the unprecedented rise in vehicle thefts. We see that
reflected in our financial results with an underwriting loss of
$44.5 million in the third quarter,"
said Rob Wesseling, President and
CEO of Co-operators. "While the net loss we experienced in Q3 is
disappointing, our balance sheet remains strong, and we continue to
achieve strong premium growth. From this position of capital
strength, we will continue to invest in long-term solutions that
provide financial security for Canadians."
CO-OPERATORS GENERAL'S THIRD
QUARTER FINANCIAL HIGHLIGHTS
($ in millions except for earnings (loss) per common share and
ratios)
|
3rd
Quarter
|
3rd Quarter
|
YTD
|
YTD
|
|
2023
|
2022
(Restated)
|
2023
|
2022
(Restated)
|
Key financial
data
|
|
|
|
|
Direct written premium
(DWP)
|
1,314.7
|
1,189.0
|
3,630.2
|
3,293.6
|
Net insurance
revenue
|
1,090.0
|
1,012.3
|
3,153.0
|
2,938.1
|
Net income
|
(0.2)
|
73.9
|
52.9
|
94.5
|
Total
assets1
|
7,302.0
|
7,137.5
|
7,302.0
|
7,137.5
|
Shareholders'
equity1
|
2,447.7
|
2,586.9
|
2,447.7
|
2,586.9
|
|
|
|
|
|
Key success
indicators
|
|
|
|
|
DWP
growth2
|
10.6 %
|
6.8 %
|
10.2 %
|
7.3 %
|
Net insurance revenue
growth2
|
7.7 %
|
N/A
|
7.3 %
|
N/A
|
Underwriting result -
excluding discounting and risk adjustment
|
(44.5)
|
36.0
|
(138.6)
|
143.4
|
Earnings (loss) per
common share
|
($0.05)
|
$2.71
|
$1.71
|
$3.27
|
Return on
equity
|
(0.0 %)
|
12.9 %
|
2.8 %
|
5.1 %
|
Combined ratio -
excluding discounting and risk adjustment
|
104.0 %
|
96.4 %
|
104.4 %
|
95.1 %
|
Minimum Capital Test
(MCT)1,2
|
227 %
|
251 %
|
227 %
|
251 %
|
1 Balance
sheet data and MCT results for 2022 are as at December
31
|
|
|
|
|
2
Comparative period ratios have not been restated or are not
available due to the transition to IFRS 17 on January 1,
2023
|
|
|
THIRD QUARTER REVIEW
In the third quarter, DWP increased by 10.6% to $1,314.7 million compared to the same quarter of
2022. There was an increase in DWP across all lines of business
with the auto line of business being the major contributor with an
increase of 14.6%. Similarly, DWP also increased across all regions
with Ontario region being the
major contributor with an increase of 11.2%. For the auto,
commercial and farm lines of business DWP growth was a combination
of policy growth, increases in average premiums and higher
retention. In the home line of business higher average premiums was
the main driver of the increase in DWP. DWP continued to increase
in the travel and other lines of business compared with third
quarter of 2022.
Co-operators General reported an underwriting loss of
$44.5 million for the third quarter
of 2023, a decline of $80.5 million
from the underwriting income of $36.0
million in the same quarter of 2022. The result was from the
increase in net undiscounted claims and adjustment expenses by
$165.1 million which outweighed the
growth in net insurance revenue of $77.7
million.
The increase in net undiscounted claims and adjustment expenses
was primarily driven by increases in current accident year claims
and unfavourable claims development in auto and commercial,
particularly in Ontario and the
West. The improvements in acquisition and other expenses by
$9.8 million were primarily due to
lower data processing expenses and overall reduction in various
expenses in this quarter compared with the same quarter in previous
year.
The combined ratio excluding discounting and risk adjustment
increased by 7.6 percentage points from the comparative quarter,
however, the ratio including discounting and risk adjustment
increased by 7.9 percentage points. The change in the net impact of
discounting and risk adjustment in the current quarter of
$33.5 million was minimal compared to
the comparative period of $33.8
million.
Net investment and insurance finance loss totalled $13.5 million for the quarter, a decrease of
$53.4 million compared to the same
quarter in the prior year. The decrease was an unfavourable
combination of increases in both net investment losses and net
finance expenses from insurance contracts. Net investment income
and gains was $5.8 million for the
quarter, a decrease of $19.4 million
compared to the net investment income and gains of $25.2 million in the comparative quarter. The
unfavourable decrease in investment income and gains is
attributable to unfavourable movements on our common share
portfolio, higher realized and unrealized losses on bonds,
partially offset by higher net investment income.
Our balance sheet, liquidity and capital positions remain strong
and enable us to continue to serve and meet the needs of our
clients while also supporting our strategic areas of focus. Our
investment portfolio is comprised of high quality and well
diversified assets. Our investment in bonds is diversified both
geographically and by sector, with a large portion invested in
Canadian government debt instruments. The equity portfolio makes up
$915.4 million or 15.1% of our total
invested assets and consists largely of publicly traded common and
preferred stocks diversified by industry sector and issuer. Our
equity portfolio is 83.1% weighted to Canadian stocks.
CAPITAL
Co-operators General's capital position remains strong, as the
Minimum Capital Test for Co-operators General was 227% as at
September 30, 2023, well above
internal and regulatory minimum requirements.
CAUTION REGARDING FORWARD-LOOKING
STATEMENTS
This document may contain forward-looking statements and
forward-looking information, including statements regarding the
operations, objectives, strategies, financial situation and
performance of Co‑operators General. These statements generally can
be identified by the use of forward-looking words such as "may",
"will", "expect", "intend", "estimate", "anticipate", "believe",
"plan", "would", "should", "could", "trend", "predict", "likely",
"potential" or "continue" or the negative thereof and similar
variations. These statements are not guarantees of future
performance and involve known and unknown risk, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in the forward-looking statements
or information. Although we believe that the expectations reflected
in the forward-looking statements and information are reasonable,
there can be no assurance that such expectations will prove to be
correct. Consequently, we make no representation that actual
results achieved will be the same in whole or in part as those set
out in the forward-looking statements and information. For further
information, refer to our third quarter 2023 MD&A or our 2022
Annual Report.
ABOUT US
Co-operators General is a leading Canadian multi-product
insurance company and is part of The Co-operators Group
Limited (Co-operators). Co-operators is a leading Canadian
financial services co-operative, offering multi-line insurance and
investment products, services, and personalized advice to help
Canadians build their financial strength and security. The company
has more than $58 billion in assets
under administration. Co-operators has been providing trusted
guidance to Canadians for the past 78 years. The organization is
well known for its community involvement and its commitment to
sustainability. Achieving carbon neutral equivalency in 2020, the
organization is committed to net-zero emissions in its operations
and investments by 2040, and 2050, respectively. Co-operators is
also ranked as a Corporate Knights' Best 50 Corporate Citizen in
Canada. For more information,
please visit: www.cooperators.ca.
Co-operators General Class E, Series C Preference Shares trade
under ticker symbol CCS.PR.C on the Toronto Stock Exchange (TSX).
Further information can be found at www.cooperators.ca.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Investor Relations
Lesley Christodoulou
Vice-President, Finance, Accounting, Reporting and Chief
Accountant
Email: lesley_christodoulou@cooperators.ca
Media Relations
Email: media@cooperators.ca
SOURCE The Co-operators Group Limited