Desjardins General Insurance Group, a subsidiary of
Desjardins Group specializing in property and casualty insurance, has announced its first quarter 2016 results, with a reported net income of C$31.5 million, compared to C$73.7 million for the same period in 2015. Meanwhile, return on equity was 5.6%, compared to the previous year's 16%.
It should be noted, however, that the variations are mostly due to the one-time gain caused by the acquisition of State Farm's Canadian operations in the first quarter of 2015.
Direct premiums written went up by 14.8% to C$1,042.9 million from C$908.7 million in Q1 2015. This organic growth is credited to renewal of auto insurance policies acquired from State Farm, as well as growth initiatives and new offerings like the Ajusto app.
The combined ratio (excluding market yield adjustment) remained mostly the same at 101.9% (101.3% in Q1 2015).
In entirety, the company’s loss ratio was more favourable that the first quarter of 2015, with 74.4% for the past quarter, compared to 79.7% in Q1 2015. However, there are two areas of concern in Ontario and Alberta.
- For Ontario, the provincial government instituted a series of reforms to bring down insurance costs which will be effective June 1, 2016.
- In Alberta, bodily injury claims have been on the rise, so the company may have to review its prices in the short term.
"Our clients that have been affected by the devastating wildfires that occurred in and around Fort McMurray can count on us. From the first moments, our claims advisors have been there to help them get through the crisis and they will keep on helping them through the rest of the subsequent claims process," said Sylvie Paquette, president and chief operating officer of DGIG.
