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 and 2022 results have been presented under the new standards. Results for 2021 have not been restated and are presented under the old standards. This annual earnings news release should be read in conjunction with our 2023 audited consolidated financial statements and management's discussion and analysis (MD&A), which include more information on the new accounting standards and the resulting changes, which are all available on SEDAR at www.sedarplus.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.
"This has been a challenging year for the insurance industry, but I'm proud of the work our team has done to stay focused on bringing our vision and strategic plan to life as an insurer, investor and co-operative partner," said
Co-operators. "Continued negative trends in increased claims and inflation have led to an underwriting loss in the year which has been mitigated by strong premium growth. Positive investment results have supported us in keeping our strong capital position and 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 FOURTH QUARTER AND YEAR END FINANCIAL HIGHLIGHTS
($ in millions except for earnings per common share and ratios)
4th Quarter | 4th Quarter | YTD | YTD | |
2023 | 2022 (Restated) | 2023 | 2022 (Restated) | |
Key financial data | ||||
Direct written premium (DWP)1 | 1,261.0 | 1,106.9 | 4,891.2 | 4,400.5 |
Net insurance revenue (NIR)1 | 1,125.7 | 1,021.8 | 4,278.7 | 3,959.9 |
Net income | 98.5 | 161.4 | 151.4 | 255.9 |
Total assets4 | 7,695.7 | 7,137.5 | 7,695.7 | 7,137.5 |
Shareholders' equity | 2,575.2 | 2,586.9 | 2,575.2 | 2,586.9 |
Key success indicators | ||||
DWP growth1,2 | 13.9 % | 7.3 % | 11.2 % | 7.1 % |
NIR growth1,2 | 10.2 % | N/A | 8.1 % | N/A |
Underwriting result - excluding discounting and risk adjustment1 | (46.3) | 27.9 | (184.9) | 171.3 |
Earnings per common share (EPS)3 | ||||
Return on equity1,2 | 16.6 % | 28.3 % | 5.9 % | 9.9 % |
Combined ratio - excluding discounting and risk adjustment1 | 104.0 % | 97.3 % | 104.4 % | 95.6 % |
Combined ratio - including discounting and risk adjustment1 | 107.8 % | 89.0 % | 104.2 % | 89.6 % |
Minimum Capital Test (MCT)2 | 236 % | 251 % | 236 % | 251 % |
1 Refer to Key Financial Measures (Non-GAAP) Section | ||||
2 Comparative period ratios have not been restated or are not available due to the transition to IFRS 17 on | ||||
3 All of the common shares of CGIC are owned by CFSL; refer to the Dividends declared section below for dividends declared per share | ||||
4 Comprised of current and non-current amounts which are disclosed in the notes to the consolidated financial statements |
Fourth Quarter Review
Fourth quarter DWP increased 13.9% over the same period of 2022 to
Co-operators General reported an underwriting loss, excluding discounting and risk adjustment, of
The loss ratio for the quarter, excluding discounting and risk adjustment, was 70.6% compared to 57.8% from the same period of 2022, a deterioration of 12.8 percentage points. The unfavourable change is driven by higher current accident year claims, unfavourable claims development and reserve strengthening. Fourth quarter acquisition and other expenses declined over the comparative period by
Net investment income and gains for the fourth quarter was
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. The credit quality of our portfolio remains high with 96.1% of our bond portfolio considered investment grade and 82.6% rated A or higher. Our equity portfolio is 82.7% weighted to Canadian stocks.
Annual Review
We continued to grow proportionally across all core lines of business and in all regions in 2023 when compared to 2022. Higher average premiums and growth in policies in force led to an increase in DWP of 11.2% and NIR growth of 8.1% over the prior year.
Our underwriting loss, excluding discounting and risk adjustment, for 2023 was
The increase in net undiscounted claims and adjustment expenses during the year was primarily driven by increases in current accident year claims and unfavourable claims development in auto, home and commercial lines of business, particularly in the
During the year the combined ratio, excluding discounting and risk adjustment, increased by 8.8 percentage points when compared to the prior year, while the ratio that includes discounting and risk adjustment increased by 14.6 percentage points. The net impact of discounting and risk adjustment significantly declined by
Net investment income and gains increased by
Capital
Co-operators General's capital position remains strong, as the Minimum Capital Test for Co-operators General was 236% as at
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 2023 Annual Report.
ABOUT US
Co-operators General is a leading Canadian multi-product insurance company and is part of
(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. Co-operators has more than
Co-operators
FOR FURTHER INFORMATION, PLEASE CONTACT:
Investor Relations
Vice-President, Finance and Chief Accountant
Email: lesley_christodoulou@cooperators.ca
Media Relations
Email: media@cooperators.ca
SOURCE
© Canada Newswire, source