Q3 combined ratio drops, net income up for Desjardins General Insurance

Desjardins General Insurance Group Inc. released Thursday its financial results for the third quarter, reporting a 9.4-point improvement in its combined ratio and a 38.8% increase in net income.

Direct written premiums were $581.9 million during the three months ending Sept. 30, up 5.8% from $550.1 million during the same period in 2013.

DGIG’s combined ratio, excluding market yield adjustment, was 85.2% in Q3 2014, down 9.4 points from 95.6% in Q3 2013.

“This was largely due to more favourable weather conditions compared to the third quarter in 2013,” DGIG stated in a press release.

DGIG is part of the property and casualty insurance operations of Levis, Quebec-based Desjardins Group, which also owns Western Financial Group Inc. of High River, Alta. Western Financial’s operations include more than 160 brokerages in Western Canada, as well as Western Direct Insurance.

Desjardins Group reported earlier this month that net premiums, for its P&C insurance, were $574 million in the most recent quarter, up 4.6% from $549 million in Q3 2013.

Investment income for Desjardins Group’s P&C insurance operations was $12 million in the third quarter, down 53.8% from $26 million in Q3 2013, “mainly due to losses recognized in profit or loss on investments as a result of the stock markets’ dismal performance at the end of the third quarter of 2014, while gains had been realized in the corresponding period in 2013,” Desjardins Group stated.

The company’s P&C products include home and auto in Ontario, Alberta and Quebec. In Ontario and Quebec, Desjardins uses telematics technology to provide usage-based insurance under the Ajusto brand. It also provides UBI, under the Intelauto brand, to clients of its group insurance segment.

In Quebec, DGIG’s business coverages include property, liability, business interruption and equipment breakdown.

DGIG reported net income of $63.0 million for the quarter ending Sept. 30, up 38.8% from the same period last year.

On Jan. 14, Desjardins announced it had agreed to acquire the Aurora, Ont.-based Canadian operations of State Farm Mutual Automobile Insurance Company.

The “preparatory work” for that acquisition is “on track,” stated Sylvie Paquette, president and chief operating officer of DGIG, in a press release Thursday.

When the acquisition closes Jan. 1, 2015, “DGIG will become the second largest P&C insurance provider in Canada, with approximately $4 billion in premium volume,” Paquette added in the release.

The acquisition includes State Farm Canada’s p&c, life insurance, mutual fund, loan and living benefits operations. Earlier this year, Desjardins stated the State Farm Canada operations will continue using the State Farm brand, serving customers in Ontario, Alberta and New Brunswick.