Co-Operators General Insurance Company reports 2009 first quarter results



    GUELPH, ON, May 5 /CNW/ - Co-operators General Insurance Company
("Co-operators General") today announced its consolidated financial results
for the three months ended March 31, 2009. For the first quarter, Co-operators
General reported a consolidated net loss of ($6.4) million, compared to net
income of $5.9 million for the same quarter in 2008. Earnings per common share
were $(0.38) for the first quarter compared to $0.23 for the same period last
year.
    "The impact of the downturn in the capital markets and increased claims
costs contributed to the loss we experienced in the first quarter," commented
Kathy Bardswick, President and CEO of The Co-operators. "Despite a challenging
environment, our fundamentals are solid, our capital position is strong, and
we continue to make progress toward our strategic objectives."

    
          Co-operators General's First Quarter Financial Highlights
               ($ in millions, except for earnings per share)

    -------------------------------------------------------------------------
                                                    1st quarter  1st quarter
                                                        2009         2008
                                                                   (restated)
    -------------------------------------------------------------------------
    Gross written premium                            $    466.0   $    440.4
    Net earned premium                               $    492.6   $    484.2
    Net investment income and net realized
     investment gains                                $     40.9   $     51.7
    Net income (loss)                                $     (6.4)  $      5.9
    Earnings per common share                        $    (0.38)  $     0.23
    Return on equity (annualized)                          (2.3)%        2.1%

    Gross written premium growth                            5.8%         4.1%
    Loss ratio                                             76.5%        76.9%
    Expense ratio                                          34.0%        32.3%
    Combined ratio                                        110.5%       109.2%
    Minimum Capital Test                                    200%         255%
    -------------------------------------------------------------------------
    

    First Quarter Review

    Gross written premium in the first quarter increased 5.8% to $466.0
million, compared to $440.4 million in the first quarter of 2008. Growth was
achieved in all product lines with Western Canada leading the regional growth,
making up $12.6 of the $25.6 million increase. Gross written premium was up
9.5% in the Quebec region, reflecting the impact of strengthened broker
relationships in the current year.
    Net earned premium growth for the quarter was 1.7% above the previous
year. Growth was predominately from Western Canada and Ontario regions, which
was partially offset by declines seen in the Quebec region relating to fewer
policies written in the prior two years resulting from the consolidation in
the insurance brokerage industry.
    First quarter net investment income from interest, dividends and real
estate rose to $34.7 million in 2009, up from $34.5 million in 2008. Net
investment gains of $6.2 million were achieved in the quarter, down from $17.3
million in the same period in 2008 where we had taken advantage of market
opportunities that existed at the time. During the quarter we recognized other
than temporary impairments of $0.9 million related to a preferred share
investment which was deemed to be other than temporarily impaired due to the
continuing weakness of the U.S. financial sector. The credit quality of our
portfolio remains high with 96.6% of our bonds rated A or higher. Our equity
portfolio is 82.8% weighted to Canadian stocks.
    The combined ratio of claims and operating expenses for the quarter was
110.5%, compared to 109.2% for the first quarter of 2008. The first quarter
loss ratio was down on auto, commercial and farm product lines. Home results
were unfavourably impacted by replacement and clean up costs as well as major
event losses relating to weather. The Quebec region experienced a 6 percentage
point improvement in the loss ratio as milder weather conditions favourably
impacted frequency and severity of claims.

    Capital

    Despite overall market impacts to our investment portfolio, Co-operators
General's capital position remains strong, as the Minimum Capital Test for
Co-operators General Insurance Company was 200% at March 31, 2009, well above
the regulatory minimum requirement of 150%.

    About Co-operators General Insurance Company:

    With assets of approximately $4.6 billion, Co-operators General is a
leading Canadian-owned multi-product insurance company. Co-operators General
Insurance Company is part of The Co-operators Group, a national group of
companies owned by 46 Canadian co-operatives, credit union centrals and
like-minded organizations. Co-operators General preference shares are listed
on the Toronto Stock Exchange under the trading symbol CCS.PR.C.





For further information:

For further information: P. Bruce West, Senior Vice-President and Chief
Financial Officer, Telephone: (519) 767-3036, Fax: (519) 824-0599


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