Canadian Market (September 01, 2008)

WINTER WEATHER HITS ING CANADA’S 2008 Q2 PROFITS

ING Canada Inc. (TSX: IIC) reported its profits declined to Cdn$112 million in 2008 Q2, down from the Cdn$194.3 million net income it reported last year.

The company said the decline was due in part to severe winter weather storms, as well as weakness in the equity markets, resulting in a reduction in investment gains.

The company’s return on equity (ROE) went from 18.3% in 2007 Q2 down to 10.3% in 2008 Q2.

Direct premiums written increased marginally in the quarter to Cdn$1.2 billion, up about 0.6% over the same period last year.

The consolidated combined ratio (excluding a market yield adjustment) was 95.6% in 2008 Q2, up 1% from the COR recorded in the same period last year.

At the same time, ING Canada’s president and CEO Charles Brindamour observed in a press release that three out of four of ING’s lines of business (excluding personal property) achieved combined ratios of below 90%.

RSA CANADA SEES INCREASED WRITTEN PREMIUMS, DECREASED PROFIT

RSA Canada reported net written premium of Cdn$851 million for the first half of 2008, up 21% over the same period of last year.

The company also reported an underwriting profit of Cdn$52 million, compared to Cdn$62 million over the fist six months of 2007, a company release says.

Combined operating ratio for the first six months was 93.7%, up slightly over last year’s 91.2%.

TRAVEL HEALTH PRODUCT PLAGUES EGI FINANCIAL’S QUARTERLY RESULTS

EGI Financial Holdings Inc. (TSX: EFH) reported a profit of Cdn$2.7 million for Q2, marking a 38.1% decrease over the same period last year (Cdn$4.3 million).

The combined ratio for 2008 Q2 jumped nearly 20% when compared to last year, increasing from 84.8% in 2007 to 101.3% this year.

The company’s underwriting income dropped 110% quarter-over-quarter, from a profit of Cdn$4.5 million to a loss of Cdn$465,000, an EGI statement says.

The company points to its two newest sources of business as contributing factors to the underwriting loss. Its emergency travel health business incurred a loss of Cdn $4.5 million and the international division business incurred a loss of Cdn $800,000 for the quarter, the release says.

“With the most recent travel season behind us and concrete steps being taken to redesign the company’s travel health product offering for the 2008-09 travel season, we anticipate stronger results over the remainder of 2008,” said EGI CEO Douglas McIntyre in a press release.

KINGSWAY’S 2008 Q2 RESULTS TURN THE CORNER

Kingsway Financial Services Inc. (TSE:KFS, NYSE:KFS) has reported net income of US$6.3 million in 2008 Q2, marking what the company called “a significant improvement” over the net loss of US$34.4 million reported in the first quarter of 2008.

Still, the result was below the net income of $41.7 million reported in the second quarter of 2007.

“The return to overall profitability in the second quarter resulted from consistent income from our investment portfolio, despite challenging market conditions, and improving performance in our insurance operations, where we have established more conservative reserving practices,” Kingsway president and CEO Shaun Jackson said in a press release.