THE CO-OPERATORS GENERAL INSURANCE COMPANY ANNOUNCES 2021 FOURTH QUARTER AND YEAR-END RESULTS

GUELPH, ON, February 17, 2022 /CNW/ – Co-operators General Insurance Company (Co-operators General) today announced its consolidated financial results for the three months and year ended December 31, 2021.

For the fourth quarter, The Co-operators General reported consolidated net income of $42.9 millioncompared to $139.1 million for the same quarter in 2020. Earnings per common share were $1.42 for the fourth quarter, compared to $5.05 for the same period last year. The direct written premium was $1,031.8 million during the quarter, an increase of $43.7 million compared to $988.1 million in the same quarter of 2020.

The net profit for the financial year amounts to $512.4 millioncompared to $290.4 million in 2020. This resulted in earnings per common share of $18.74 compared to $10.49 in the previous year. Direct written premiums increased by 5.1% to reach $4,108.3 millioncompared to $3,909.9 million in the previous year.

“Our continued efforts to improve underwriting profitability – coupled with positive investment performance and lower claims throughout the year – led to strong financial results and further strengthened our capital position” , said Rob Wesseling, CEO of The Co-operators. “While the insured losses and community impacts of climate events in 2021 were significant, our financial strength allows us to continue to innovate, invest in the resilience of our communities and, as always, meet the changing needs of our wide range of members and clients.

Co-operators General Fourth Quarter Financial Highlights

(in millions of Canadian dollars except ROE, EPS and ratios)






4th trimester

2021

4th trimester

2020

2021

YTD

2020

YTD


Key financial data





Direct Written Premium (DWP)

1,031.8

988.1

4,108.3

3,909.9

Net Earned Premium (NEP)

965.9

950.5

3,790.2

3,582.1

Net revenue

42.9

139.1

512.4

290.4

Total assets

9,008.5

8,261.6

9,008.5

8,261.6

Equity

2,394.8

2,118.0

2,394.8

2,118.0






Key indicators of success





DWP Growth

4.4%

4.5%

5.1%

4.2%

NEP growth

1.6%

9.7%

5.8%

9.4%

Technical result – excluding market yield adjustment (MYA)

10.2

86.2

406.7

180.1

Earnings per share (EPS)

$1.42

$5.05

$18.74

$10.49

Annualized return on equity (ROE)

8.0%

33.3%

25.5%

16.2%

Combined ratio – excluding MYA

99.0%

90.9%

89.2%

95.0%

Combined ratio – including MYA

99.7%

92.9%

88.7%

97.7%

Minimum Capital Test (MCT)

239%

232%

239%

232%

Fourth quarter review

Fourth quarter DWP increased 4.4% or $43.7 million compared to the same quarter of 2020, while the NEP increased by 1.6% or $15.4 million in the same quarter. This growth in DWP and NEP is attributable to higher average premiums combined with an increase in policies in force in the commercial and residential lines of business.

Our combined ratio, excluding MYA, deteriorated by 8.1 percentage points to 99.0% from 90.9% in the fourth quarter of 2020. This was mainly due to an increase in our expense ratio, which s deteriorated by 5.1 percentage points to 38.2%, due to increases in operating costs related to higher spending on strategic initiatives. Our fourth quarter loss ratio, excluding MYA, also deteriorated by 3.0 percentage points to 60.8%, due to higher major events, including a catastrophic flood in British Columbia.

Net investment income and gains for the fourth quarter were $44.5 milliona decrease of $63.7 million compared to the same quarter of the previous year. The decrease is mainly attributable to unrealized losses on preferred shares and realized losses on bonds, which contrasts with the unrealized gains on preferred shares and realized gains on bonds in the same quarter last year .

Our balance sheet, liquidity and capital positions remain strong and allow us to continue to serve and meet the needs of our customers while supporting our strategic focus areas. Our investment portfolio is made up of high-quality and well-diversified assets. The credit quality of our portfolio remains high with 96.4% of our portfolio considered investment grade and 83.6% rated A or better. Our equity portfolio is 83.5% Canadian equities.

Annual review

DWP for the year increased 5.1% to $4,108.3 millioncompared to $3,909.9 million in 2020. This increase is driven by higher average premiums across all lines of business and geographies, particularly in commercial and residential lines of business.

CIP increased by $208.1 million i.e. 5.8% to $3,790.2 million due to the growth seen in all our geographies and in all our main business sectors.

Excluding AMA, the combined ratio improved by 5.8 percentage points, from 95.0% in 2020 to 89.2% in 2021. This was largely explained by the premium growth associated lower claims in the commercial and motor lines of business, partially offset by higher claims. activity in the domestic and agricultural sectors. The expense ratio deteriorated by 2.3 percentage points, due to higher operating expenses related to strategic initiative spending and higher personnel costs.

Net investment income and gains decreased by $51.1 million year-over-year due to realized losses on bonds due to higher interest rates, combined with lower realized gains on common stocks, due to lower turnover than the last year. These were partially offset by higher unrealized gains on preferred shares and lower impairment losses compared to the prior year.

Capital city

The capital position of Co-operators General remains strong, as the minimum capital test for Co-operators General was 239% at December 31, 2021, well above the minimum internal and regulatory requirements. We continue to closely monitor capital levels in response to the changing economic environment with respect to the COVID-19 pandemic.

Caution Regarding Forward-Looking Statements

This document may contain forward-looking statements and information, including statements regarding the business, objectives, strategies, financial condition and performance of The Co–operators General. These statements can generally be identified by the use of forward-looking words such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plans”, “could”, “should”, “could”, “trend”, “predict”, “likely”, “potential” or “continue” or their negative and similar variations. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements or information, including the impact of the COVID pandemic -19.on our investments, operations and claims adversely affecting the results of our operations and our financial condition.While we believe that the expectations reflected in the forward-looking statements and information are reasonable, there can be no assurance that such expectations will turn out to be correct. Accordingly, we do not guarantee that the actual results obtained will be identical in whole or in part to those indicated in the forward-looking statements and information.

About The Co-operators General Insurance Company

With assets of over $9.0 billion, The Co-operators General is a Canadian leader in multi-product insurance. Co-operators General is part of The Co-operators Group Limited, a Canadian co-operative. Through its group of companies, it offers home, auto, life, group, travel, commercial and farm insurance, as well as investment products. The Co-operators is well known for its community involvement and commitment to sustainability. Co-operators named one of Corporate Knights Top 50 Corporate Citizens in Canada and is one of the best employers in Canada by Kincentric (formerly AON). For more information, visit www.cooperators.ca.

The Co-operators General Class E Preferred Shares, Series C trade under the symbol CCS.PR.C on the Toronto Stock Exchange (TSX). More information can be found at www.cooperators.ca.

SOURCE The Co-operators Group Limited

For further information: Investor Relations, Lesley Christodoulou, Vice President, Corporate Finance Services, Phone: 1-888-767-3909 Ext: 302493, Email: [email protected]; Media Relations, Email: [email protected]