EGI Financial Holdings takes loss in 2012 Q2, cites claims in previously cancelled niche products division programs

EGI Financial Holdings Inc. (TSX: EFH) has reported a net operating loss of $1 million for 2012 Q2, which the company attributed to “a $5.3-million (pre-tax) impact from cancelled programs in the niche products division.”

The result compares to a net operating income of $1.5 million for the same quarter in 2011.

“We are very pleased to report our core personal lines business, which accounts for the majority of our earned premiums, significantly exceeded its target profitability in the quarter and more than doubled its underwriting income from the same quarter last year,” says Steve Dobronyi, CEO of EGI. “The division has now recorded seven consecutive quarters of underwriting profitability.

“However, our results in Canada suffered from the development of claims in our niche products division on previously cancelled programs. We continue to closely monitor these claims and are gaining greater certainty on the amount of the ultimate payouts as the claims develop.”

The company reported a combined operating ratio of 88% in personal lines, resulting in an underwriting profit of $3.6 million. It also had a 25% increase in written premiums over 2011 Q2, in addition to a 7% year-over-year increase in net earned premiums.