Co-operators suffers financial blues

Following a dismal performance for the 1999 financial yearend, Canada’s largest private insurer Co-operators General Insurance Company reported significantly lower earnings for the first quarter of the current financial year. Net income for the first three months of this year amounted to $2 million compared with $7.6 million reported for the same period the year prior. This translates to earnings of 3 a share for the latest reporting period against 31 a share produced at the end of the first quarter of 1999.

Gross premiums generated for the 2000 first quarter came in at $315 million (1999: $313 million) with investment income adding an additional $39.1 million to the income statement compared with last year’s gain of $38.6 million. The combined ratio for the current reporting period clocked in at 111.9% (1999: 109.2%), with the claims ratio remaining fairly static at 80.7% (1999: 78.9%). “Higher claims ratios are normally expected in the first quarter and are not indication of expected yearend results,” says president Terry Squire. Co-operators revealed a company restructuring plan in the commentary to the fourth quarter 1999 results, the costs of which were largely blamed for the company’s slip into the red ink.