- Net operating income per share of
- Healthy combined ratio of 96.6% with claims ratio improvements in all lines
- Continued solid top-line growth of 5.4%
- Book value per share rose 10.7% over the last twelve months
- Operating ROE of 14.1% for the last twelve months with
Net operating income for the first nine months of the year was
CEO's Comments
"The solid growth of our premiums and our much improved underwriting performance confirm the continuation of more favourable industry conditions and the positive results of the initiatives we have launched over the last two years. These are strong results, given the impact of the severe storms of the last few months," said
"Home and commercial insurance results have improved significantly since the beginning of the year. However, auto insurance results continued to be impacted by the increase in the cost of medical claims in
"Our financial position remains strong with
Dividend
The Board of Directors declared a quarterly dividend of
Current Outlook
Personal property premiums continue to increase across the industry to reflect the impact of more frequent or severe storms, as well as water-related losses which are the leading cause of home insurance claims. In personal auto, a new insurance regime took effect in
Consolidated Highlights
<<
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In millions of
dollars, except as YTD YTD
otherwise noted Q3-2010 Q3-2009 Change 2010 2009 Change
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Direct premiums
written (excluding
pools) 1,205.8 1,144.1 5.4% 3,437.9 3,263.6 5.3%
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Underwriting
income(1) 36.7 (53.2) n/a 171.9 (2.1) n/a
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Net operating
income(2) 89.0 21.6 312.0% 320.0 183.5 74.4%
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Net income (loss) 82.3 (8.0) n/a 322.3 30.0 974.3%
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Net operating income
per share (dollars) 0.78 0.18 333.3% 2.76 1.53 80.4%
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Earnings per share
Basic and diluted
(dollars) 0.72 (0.07) n/a 2.78 0.25 n/a
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Operating ROE for
the last 12
months(3) 14.1% 8.4% 5.7 pts
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Combined ratio
(excluding MYA) 96.6% 105.2% (8.6)pts 94.5% 100.1% (5.6)pts
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Weighted average
number of shares
outstanding
(millions) 113.7 119.9 (6.2) 116.0 119.9 (3.9)
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(1) Underwriting income is defined as underwriting income excluding
market yield adjustment (MYA).
(2) Net operating income is defined as the sum of underwriting income,
interest and dividend income and corporate and distribution income
after tax.
(3) Operating ROE is defined as net operating income for the last 12
months divided by the average shareholders' equity (excluding
accumulated other comprehensive income) for the same 12-month period.
The average shareholders' equity is calculated by adding the
beginning balance and the ending balance and dividing by two.
Operating Highlights
- Net operating income for the quarter was $89.0 million , up from $21.6
million from the same quarter in 2009, as a result of improved
underwriting results. The operating ROE for the last 12 months was
14.1%, up 5.7 percentage points. Net operating income for the first
nine months of the year was $320.0 million , up from $183.5 million
during the same period last year.
- Direct premiums written increased 5.4% in the third quarter to $1,206
million . Personal insurance premiums grew 6.5% mainly as a result of
higher rates. Commercial auto insurance premiums were up 7.3% while
commercial P&C premiums declined by 0.3%. The growth in commercial
P&C was slowed by the cancellation of a number of commercial group
accounts late last year. These cancellations resulted in a 3.2
percentage point decline in premiums for commercial P&C in the
quarter and are expected to have an estimated 2 percentage point
impact in the fourth quarter. For the first three quarters of the
year, total direct premiums written increased 5.3% compared to the
same period in 2009, to $3,438 million .
- Underwriting income in the quarter was $36.7 million compared to a
loss of $53.2 million last year as a result of a reduction in the
amount of large losses, including those associated with severe
weather. Overall, the combined ratio improved by 8.6 percentage
points to 96.6%. The improvement took place despite a $49.7 million
loss resulting from severe storms and the anticipated significant
increase in medical claims in the months leading up to the
implementation of auto insurance reforms in Ontario .
>>
The underwriting performance in home insurance continued to improve during the quarter with a combined ratio of 106.0%, a 23.3 percentage point improvement over the same period of last year. Personal auto underwriting income was down by
Commercial insurance underwriting income improved significantly during the quarter to reach
Total underwriting income for the first nine months of the year was
<<
- Interest and dividend income, net of expenses remained unchanged at
$73.0 million with a market-based yield of 4.1% Total interest and
dividend income, net of expenses, for the first nine months was up
2.8% to $221.5 million .
>>
Investment Gains
Net losses on invested assets, excluding HFT bonds, were modest at
Capital Management
The company's book value per share has risen by
At the end of September, the company had acquired under the Normal course issuer bid launched in February, 6.952 million shares at an average price of
Analysts Estimates
The average estimate of earnings per share and net operating income per share for the third quarter among the analysts who follow the company was
Conference Call
The conference call is also available by dialling (647) 427-7450 or 1 (888) 231-8191 (toll-free in
A replay of the call will be available later today at
About
Forward Looking Statements
This document may contain forward looking statements that involve risks and uncertainties. The company's actual results could differ materially from these forward looking statements as a result of various factors, including those discussed in the company's most recently filed Annual Information Form and annual Management's Discussion & Analysis. Please read the cautionary note at the end of the MD&A.
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