Co-Operators reports drop in year-end profit

Co-Operators General Insurance Company announced a profit of Cdn$62.1 million for 2008, marking a drop from 2007’s net income of Cdn$148.2 million.The company reported a net loss of Cdn$18.3 million in 2008 Q4, a decrease from 2007 Q4’s profit of Cdn$60.8 million.The insurer’s loss ratio increased year-over-year from 66.5% in 2007 to 73.6% in 2008. Quarter-over-quarter, the loss ratio increased from 61.7% in 2007 Q4 to 76.1% in 2008 Q4.The combined ratio climbed from 98.3% to 106.2% (2007 and 2008, respectively), and from 93.6% in 2007 Q4 to 109.4% in 2008 Q4.The company attributes the increase in the combined ratio to “an increase in current accident year claims, an increase in property losses due to storm activity, a decrease in the interest rate used to discount claims liabilities, a significant Facility Association loss as well as the Alberta and Nova Scotia legislation challenges relating to the cap on minor bodily injuries,” a Co-Operators statement says.Net earned premium for 2008 was Cdn$1.98 billion, marking an increase over 2007’s net earned premium of Cdn$1.908 billion. Net investment income increased to Cdn$145.5 million from Cdn$142.3 million in 2007 (this was Cdn$24.2 million in 2008 Q4 compared to Cdn$58.6 million in 2007 Q4).