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Desjardins General Insurance Group reports strong growth in third quarter

Friday, November 23, 2012 7:31 AM


Highlights

  • Net income of $126 million for first three quarters, up $39.8 million from 2011
  • Gross written premiums increases of 9.1% in third quarter and 9% for the first three quarters, entirely through organic growth
  • Combined ratio of 95.3% in the first nine months, down 4.7 percentage points from the same period in 2011

LÉVIS, QC, Nov. 23, 2012 /CNW Telbec/ - For the quarter ended September 30, 2012, Desjardins General Insurance Group (DGIG), a Desjardins Group subsidiary specializing in property and casualty insurance, posted a net income of $22.8 million, compared to $28.6 million during the same quarter last year.

This drop was largely the result of the decline in investment income from $64.6 million in the third quarter of 2011 to $37.9 million in the same quarter this year. For the first nine months of the year, net income was $126.6 million, an increase of $39.8 million from the same period in 2011.

Gross written premiums were $517 million in the third quarter and $1,522 million in the first nine months. This represents increases of 9.1% and 9.0%, respectively, compared to the same periods last year.

Sylvie Paquette, DGIG President and Chief Operating Officer, said she was pleased by DGIG's consistent above-market growth. "We are growing at a steady pace in all of our markets and regions of the country, and we are on track to surpass $2 billion in premium volume by the end of the year. This is a remarkable accomplishment considering that our growth has been entirely organic and considering the fierce competition in the P&C insurance market."

Despite severe wind and hail storms in Alberta, Ontario and Quebec, the loss ratio for the third quarter fell to 78.2%, a drop of 4.7 percentage points from the third quarter of 2011.  This helped drive the combined ratio (loss ratio plus expense ratio) down 5.6 percentage points to 101.1% for the quarter. For the first nine months of the year, the loss ratio dropped 4.3 percentage points to 71.1%, while the combined ratio dropped 4.7 percentage points to 95.3%.

Looking forward, Ms. Paquette says she is concerned by two issues: profitability in the Ontario auto insurance market and the impact of the prolonged period of low interest rates.

"Although it has improved, there are still a great many questions about the Ontario auto insurance market, particularly with the current political situation in Ontario," she said.

In regards to the low interest rate environment, Ms. Paquette said that DGIG's investment income has held up remarkably well so far, but the future looks challenging.

"As investments are rolled over at lower rates over the next couple of years, this will have a negative impact on our bottom line. Fortunately, DGIG is in a good position to weather this challenge as it has produced an underwriting profit for 19 consecutive years and counting," she added.

About Desjardins General Insurance Group

A subsidiary of Desjardins Group, Desjardins General Insurance Group provides home and auto insurance to consumers across the country and commercial insurance to businesses in Quebec.  With 4,000 employees across Canada, a portfolio of more than 2 million policies in force, gross written premiums of $1.9 billion and assets of over $4 billion, DGIG ranks among the largest P&C insurers in Canada.

SOURCE: Desjardins Groupe d'assurances générales

(for journalists only):

Caroline Phémius
Media Relations, Desjardins Group
514-281-7000 or 1-866-866-7000, ext. 7646
media@desjardins.com

(Source: CNW )
(Source: Quotemedia)

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