Co-operators General Insurance Company Reports 2012 Fourth Quarter and Year End Results

Co-operators General Insurance Company Reports 2012 Fourth Quarter and Year 
End Results 
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." 


(in millions of Canadian dollars
except ROE, EPS and ratios)                                            
                          4th quarter   4th quarter      2012      2011
                                 2012          2011       YTD       YTD

Key financial data                                                     

Direct written
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

Key success

Direct written
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

Annualized return
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%

Minimum Capital
Test (MCT)                       260%          259%      260%      259%

(1)Balances exclude L'Union Canadienne for all periods presented.


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 
in 2012.


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.


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

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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CO: The Co-operators
ST: Ontario

-0- Feb/14/2013 21:30 GMT

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