One insurer seems to have weathered its first quarter by reporting strong Q2 numbers, crediting investment in a revamped administration system.
Economical Insurance has reported net income of $43.6 million for the second quarter of the year, up from $15.8 million in the same period of 2013.
“Our second quarter results reflect the strong performance of our insurance operations and represent a significant improvement from the severely weather-impacted first quarter of 2014,” said Karen Gavan, Economical’s president and CEO commented in its statement. “As we reach the first anniversary of the catastrophic Alberta flooding of June 2013, it serves as a potent reminder of the vital importance of our role and the protection we provide to our policyholders and the communities we serve.”
The Waterloo, Ont.-based company also grew its gross written premiums by 2.9 per cent over the second quarter of 2013, from $539.8 million to $555.5 million.
According to a statement from Economical, “the first phase of the mandated rate decreases for Ontario auto have now been implemented by the company. The impact on longer-term profitability will continue to develop as policies are issued and renewed at the lower rates. Commercial lines growth was flat overall in the quarter as increasing rates were offset by lower retention levels in targeted products.”
Personal lines premium grew by $15.5 million, or 4.8 per cent in the second quarter, driven by Ontario auto.
For the year to date, gross written premiums grew by $29.2 million, with personal lines growing by $17.5 million and commercial lines increasing by $11.6 million, driven by rate increases in targeted markets in Ontario and western Canada. (continued.)
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The company also reported $22.5 million of underwriting income for the second quarter, “primarily due to strong personal lines and commercial auto performance combined with the absence of weather-related catastrophe losses.”
The strong second quarter can in part be attributed to the transformation in the way Economical conducts its business, said Gavan.
“We continue to invest significantly in transforming our business,” she said, “as illustrated by our recently announced agreement with Guidewire to replace our policy administration system, and in respect of our business transformation program which is nearing completion. These significant investments will provide the platform to support our future profitable growth goals.”
