Co-operators General Insurance Company Reports 2012 Fourth Quarter and Year
GUELPH, ON, Feb. 14, 2013 /CNW/ - Co-operators General Insurance Company
("Co-operators General") today announced its consolidated financial results
for the three months and year ended December 31, 2012. For the fourth
quarter, Co-operators General reported consolidated net income of $114.2
million, compared to $91.9 million for the same quarter in 2011. Earnings per
common share was $5.36 for the fourth quarter compared to $4.28 for the same
period last year.
Net income for the year amounted to $257.7 million, compared to $150.3 million
in 2011, resulting in earnings per common share of $11.84 compared to $6.59 in
"We were pleased with the strong financial performance in 2012. This capped
off a year in which our organization proudly joined the rest of the world in
celebrating the International Year of Co-operatives and reinforced our ongoing
commitment to those values that provide a competitive advantage for us," said
Kathy Bardswick, President and CEO of The Co-operators."Fourth quarter
results were positively impacted by the saleof L'Union Canadienne. In
addition, we experienced strong policy growth, and Net Earned Premium
increased in all core lines of business and in all regions of the country."
CO-OPERATORS GENERAL'S FOURTH QUARTER FINANCIAL HIGHLIGHTS
(in millions of Canadian dollars
except ROE, EPS and ratios)
4th quarter 4th quarter 2012 2011
2012 2011 YTD YTD
Key financial data
premium (DWP)(1) 518.7 504.7 2,106.6 2,050.0
Net earned premium
(NEP)(1) 517.7 495.2 2,016.4 1,925.1
Net income 114.2 91.9 257.7 150.3
Total assets 4,902.7 5,292.8 4,902.7 5,292.8
equity 1,440.1 1,524.2 1,440.1 1,524.2
premium (DWP)(1) 2.8% 0.8% 2.8% 0.7%
Net earned premium
(NEP)(1) 4.5% 4.2% 4.7% 3.3%
Earnings per share
(EPS) $5.36 $4.28 $11.84 $6.59
on equity (ROE) 33.5% 27.3% 19.1% 11.4%
Combined ratio -
excluding MYA 94.1% 83.1% 95.2% 96.8%
Combined ratio -
including MYA 93.9% 84.9% 96.4% 97.8%
Test (MCT) 260% 259% 260% 259%
(1)Balances exclude L'Union Canadienne for all periods presented.
FOURTH QUARTER REVIEW
Fourth quarter DWP increased to $518.7 million, compared to $504.7 million in
the fourth quarter of 2011. This increase relates to higher average premium
across certain product lines and more vehicles in force in Ontario and the
The combined ratio, excluding the market yield adjustment (MYA) for the
quarter was 94.1%, which increased from 83.1% during the comparable period
last year. Loss ratio deterioration is attributed to the combination of higher
incurred but not reported reserves and lower favourable claims development
compared to 2011. Even
though we have experienced favourable claims in both quarters, the reserves
released in the fourth quarter of 2011 were greater.
Net investment income and gains increased by $14.9 million versus the fourth
quarter of 2011. Net investment income and gains was positively impacted by
$5.4 million less impairment losses compared to the same period in the prior
year and realized gains were $4.6 million higher. Net investment income and
gains was also positively impacted by changes in valuation of embedded
derivatives in our preferred share portfolio.
On October 1, 2012, we closed the sale of L'Union Canadienne, Compagnie
d'assurances (L'Union Canadienne) for cash consideration of $150.0 million.
Our net income includes $34.0 million relating to the gain on sale of L'Union
Canadienne, after closing adjustments and tax.
The Company's investment portfolio composition is conservative and the assets
are high quality and well diversified. The credit quality of our bond
portfolio remains high with 92.5% rated A or higher. Our equity portfolio is
83.1% weighted to Canadian stocks, with a further weighting to large financial
institutions. Commercial mortgages make up 9.3% of our total invested assets,
and are of high quality, with no mortgages in arrears over 60 days.
DWP increased 2.8% to $2,106.6 million, compared to $2,050.0 million in 2011.
Improved results are primarily driven by policy and client growth which offset
rate decreases in certain lines of business.
NEP has increased by $91.3 million or 4.7% to $2,016.4 million. The increase
is seen in all of our core lines of business and across all regions of the
Net investment income and gains increased to $205.8 million from $157.1
million in 2011 as a result of the low interest rate environment and
improvements in the equity markets. We realized net gains of $65.2 million on
sale opportunities from our bond and stock portfolios. Impairment losses
decreased by $23.5 million from 2011.
Excluding the MYA, the combined ratio improved to 95.2% from 96.8% in 2011 due
to NEP improvements which offset increased net claims and adjustment expenses.
Net claims and adjustment expenses have increased 2.7% from last year, which
is mainly the result of increased incurred but not reported reserves and lower
favourable claims development compared to 2011. Partially offsetting these
increases are decreased current accident year claims across our core lines of
Our total assets have decreased $390.1 million from 2011, which is mainly the
result of claims settlement and dividends paid on preferred and common shares
The Company's capital position remains strong, as the Minimum Capital Test
(MCT) for Co-operators General was 260% at December 31, 2012, well above the
regulatory minimum requirement of 150%. The MCT has increased from 259% at
December 31, 2011 due to higher earnings offset by dividends paid on preferred
and common shares and MCT calculation changes effective January 1, 2012.
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
Insurance Company. 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.
ABOUT CO-OPERATORS GENERAL INSURANCE COMPANY
With assets of more than $4.9 billion, Co-operators General is a leading
Canadian-owned multi-product insurance company. Co-operators General is part
of The Co-operators Group Limited, a Canadian-owned co-operative. Through its
group of companies it offers home, auto, life, group, travel, commercial and
farm insurance, as well as investment products. The Co-operators is well known
for its community involvement and its commitment to sustainability, and is
listed among the 50 Best Employers in Canada.
Co-operators General Class E, Series C Preference Shares trade under ticker
symbol CCS.PR.C and the Class E Series D Preference Shares trade under ticker
symbol CCS.PR.D. Both series of shares trade on the Toronto Stock Exchange
(TSX). Further information can be found at www.cooperators.ca.
P. Bruce West Executive Vice-President, Finance and Chief Financial Officer
Telephone: (519) 767-3036 Fax: (519) 824-0599
SOURCE: The Co-operators
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-0- Feb/14/2013 21:30 GMT
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