CO‑OPERATORS GENERAL INSURANCE COMPANY REPORTS THIRD QUARTER 2024 RESULTS

This quarterly earnings news release should be read in conjunction with our third quarter 2024 unaudited condensed consolidated interim financial statements and management's discussion and analysis (MD&A) as well as our 2023 Annual Report which are all available on SEDAR+ at www.sedarplus.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.

GUELPH, ON, Oct. 31, 2024 /CNW/ - Co‑operators General Insurance Company (Co‑operators General) today released consolidated financial results for the three months ended September 30, 2024. The consolidated net loss was $45.2 million compared to net loss of $0.2 million for the same quarter in 2023. This resulted in losses per common share of $1.71 for the quarter, compared to $0.05 in the same period last year.

"The third quarter of 2024 was challenging for many Canadians and our clients with four major weather events resulting in devastating impacts, with more than $7 billion in insured losses across the industry. This illustrates, once again, the critical need to broaden the traditional approach of risk protection to also prioritize risk reduction and loss prevention," said Rob Wesseling, President and CEO of Co‑operators. "These events impacted our underwriting loss in the quarter which was offset by policy growth across all lines of business and positive investment results, ensuring our overall capital position remains strong."

CO‑OPERATORS GENERAL'S THIRD QUARTER FINANCIAL HIGHLIGHTS

($ in millions except for earnings per common share and ratios)

	3rd quarter	3rd quarter	YTD	YTD
	2024	2023	2024	2023
Key financial data
Direct written premium (DWP)	1,514.6	1,314.7	4,150.4	3,630.2
Net insurance revenue (NIR)	1,222.4	1,090.0	3,531.8	3,153.0
Net income (loss)	(45.2)	(0.2)	144.3	52.9
Net investment income and gains	174.7	5.8	344.3	149.1
Total assets^1	8,379.4	7,695.7	8,379.4	7,695.7
Shareholders' equity^1	2,718.4	2,575.2	2,718.4	2,575.2
Key success indicators
DWP growth	15.2 %	10.6 %	14.3 %	10.2 %
NIR growth	12.1 %	7.7 %	12.0 %	7.3 %
Underwriting result - excluding discounting and risk adjustment	(180.9)	(44.5)	(111.9)	(138.6)
Earnings (loss) per common share (EPS)	($1.71)	($0.05)	$5.06	$1.71
Return on equity (ROE)	(6.5 %)	(0.0 %)	7.3 %	2.8 %
Combined ratio - excluding discounting and risk adjustment	114.7 %	104.0 %	103.2 %	104.4 %
Minimum Capital Test (MCT)^1	214 %	236 %	214 %	236 %
^1Financial position data and MCT results for 2023 are as at December 31

THIRD QUARTER REVIEW

In the third quarter, DWP increased by 15.2% to $1,514.6 million compared to the same quarter of 2023, while NIR increased by 12.1% to $1,222.4 million compared to the same quarter last year. The increase in DWP was across all core lines of business, with the auto line of business being the largest contributor, with an increase of 21.0%. DWP also increased across all regions, with the Ontario region being the largest contributor with an increase of 16.1%. Growth in both DWP and NIR was a result of increases in average premiums and growth in vehicles and policies in force primarily due to new business, as well as higher retention.

Co‑operators General's underwriting loss, excluding discounting and risk adjustment, for the third quarter of 2024 was $180.9 million, a decrease of $136.4 million from the underwriting loss of $44.5 million in the same quarter of 2023. The unfavourable result was primarily due to a combination of increases in the net undiscounted claims and adjustment expenses of $230.3 million and acquisition and other expenses of $38.5 million when compared to the third quarter of 2023. This result was partially offset by growth in NIR of $132.4 million compared to the same quarter of the prior period.

The increase in net undiscounted claims and adjustment expenses was primarily driven by higher major event activity related to four major events in this quarter as well as higher accident year claims. The increase in current year claims were partially offset by lower prior year claims development compared to the third quarter of 2023. The increase in acquisition and other expenses was driven by the growth in premium, which resulted in increases in premium taxes expense, net commissions and advisor-related expenses.

The four major events had a significant impact on our results this quarter resulting in higher claims, primarily in the home and auto lines of business. The quarter-to-date losses, net of reinsurance and inclusive of costs relating to reinsurance reinstatement premiums from these events were a total of $180.6 million.

The combined ratio, excluding discounting and risk adjustment, deteriorated by 10.7 percentage points from the comparative period due to the unfavourable underwriting results in this quarter. When including discounting and risk adjustment, the combined ratio deteriorated by 18.5 percentage points over the comparative period.

Net investment and insurance finance results increased favourably by $95.1 million, representing $81.6 million in income in the current quarter compared to a loss of $13.5 million in the comparative period. The favourable result was primarily due to an increase of $168.9 million in total net investment income and gains when compared with the same quarter in the prior year.

Net investment income and gains was $174.7 million for the quarter compared to the total net investment income and gains of $5.8 million in the comparative quarter. The increase was primarily driven by unrealized gains on common shares and bonds driven by more favourable valuations in equity markets and fixed income.

Our balance sheet, liquidity and capital positions remain strong and enable us to continue to serve and meet the needs of our clients while also supporting our strategic areas of focus. Our investment portfolio is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 97.7% of bond portfolio considered investment grade and 82.6% rated A or higher. Our equity portfolio is 82.7% weighted to Canadian stocks.

CAPITAL

Co‑operators General's capital position remains strong, as the Minimum Capital Test for Co‑operators General was 214% as at September 30, 2024, well above internal and regulatory minimum requirements. We continue to closely monitor capital levels in response to the changing economic environment.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements and forward-looking information, including statements regarding the operations, objectives, strategies, financial situation and performance of Co‑operators General. These statements generally can be identified by the use of forward-looking words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "plan," "would," "should," "could," "trend," "predict," "likely," "potential," and "continue," or the negative thereof and similar variations. These statements are not guarantees of future performance, and they 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. We believe that the expectations reflected in the forward-looking statements and information are reasonable; however, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, levels of activity, performance or achievements. Consequently, we make no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements and information. For further information, refer to our third quarter 2024 MD&A or our 2023 Annual Report.

ABOUT US

Co‑operators is a leading Canadian financial services co-operative, offering multi-line insurance and investment products, services, and personalized advice to help Canadians build their financial strength and security. Co‑operators has more than $64 billion in assets under administration and has been providing trusted guidance to Canadians since 1945. The organization is well known for its community involvement and its commitment to sustainability. Currently a carbon neutral organization, Co‑operators is committed to net-zero emissions in its operations and investments by 2040, and 2050, respectively. Co‑operators is also ranked as a Corporate Knights' Best 50 Corporate Citizen in Canada.

Co‑operators General Class E Preference Shares Series C, trade under ticker symbol CCS.PR.C on the Toronto Stock Exchange (TSX).

For more information, please visit: www.cooperators.ca.

CONTACT INFORMATION

Investor Relations
Lesley Christodoulou
Vice-President, Finance and Chief Accountant
Email: [email protected]

Media Relations
Email: [email protected]

SOURCE The Co-operators Group Limited