Desjardins General Insurance Group kept its head above water on its second quarter earnings despite the flooding in Alberta, posting an increased net income compared to the same period last year.
DGIG, a Desjardins Group subsidiary specializing in property and casualty insurance, posted a net income of $42.5 million for the quarter ending June 30, up 13.3 per cent from the corresponding period in 2012.
Sylvie Paquette, DGIG president and COO, said that despite the Alberta flooding and continuing low level interest rate challenges, DGIG's second quarter and year-to-date performance was satisfactory.
"Many of our clients were strongly affected by the torrential rains that hit Alberta and our hearts go out to the victims of the floods during these difficult times,” said Paquette. “Our employees were mobilized promptly to respond to their needs, addressing claims rapidly to facilitate restoration work." (continued.)
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Despite record floods that hit southern Alberta, the combined ratio for the quarter was 88.l4 per cent.
DGIG reported direct written premiums increased in the quarter to $584.6 million, compared to $550.1 million in 2012. All business areas contributed to the above market 6.3% growth – general market home and auto insurance, group insurance, white label partnerships and commercial lines
“The launch of our Ajusto and Intelauto (for the group market) usage based insurance programs in May has been a tremendous success, with a take up rate significantly above our expectations,” said Paquette. “This has provided a key competitive edge during a slow growth period in the Ontario and Quebec markets, and we are looking forward to introducing the programs in Alberta, following regulatory approvals.”
For the first six months of the year, net income was $67.9 million, down from $99.7 million for the same period in 2012, which benefited from unseasonably mild weather in the first quarter. The ROE for the first six months was 14.2 per cent, down from 24.8 per cent in 2012. Direct written premiums rose by 6.2 per cent to $1.067 billion and the combined ratio was 94.1 per cent, up 1.2 percentage points from the same period last year.
The recent railway disaster in Lac-Mégantic, Que. also struck a chord with DGIG, as Paquette took the time to extend condolences and praise those Desjardins employees who were actively involved in the aftermath. (continued.)
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“Our hearts also go out to the families and friends of the victims of the Lac-Mégantic tragedy in Quebec in early July,” she said. “I am proud that so many Desjardins employees from different groups were on the scene quickly to help our clients and other victims, and to support the devastated community. Many of our employees worked long hours and postponed vacation time to lend a helping hand during this crucial time.”
DGIG has more than 3,700 employees across Canada, a portfolio of more than 2.1 million policies in force, gross written premiums of more than $2 billion and assets of over $4.4 billion.
