Northbridge 1-Q earnings benefit from investment gains

Northbridge Financial Corp. (TSX: NB), the holding company for the Fairfax group’s Canadian insurance operations, lifted net earnings for the first quarter of this year by 76.5% to $56.8 million compared with the $32.2 million reported for the same period in 2004. This equates to earnings for the latest reporting period of $1.12 a share against the 63c a share disclosed for last year’s first quarter result.The company’s bottom-line for the first quarter of 2005 primarily benefited from an 88% year-on-year hike in total investment income (realized gains and investment income combined) of $57.1 million versus the $30.4 million disclosed for the same period of last year. This gain largely resulted from the sale of portfolio investments amounting to $39.9 million and an additional $4.4 million derived from the disposal of subsidiary, Federated Life Insurance Co. of Canada.The Northbridge operations also benefited from an overall 21.3% year-on-year rise in underwriting profit for the first quarter of this year, which clocked in at $24.6 million (2004 1-Q: $20.3 million). The improved underwriting result saw the company’s combined ratio improve marginally to 91.4% for the latest reporting period compared with the 92.8% ratio shown at the end of 2004’s first quarter.