August 7, 2017 11:30
After a year 2016, concluded in the red, the Company recorded a net loss of$ 18.5 Million in the second quarter of 2017, a decrease of$ 35.6 Million compared to the corresponding quarter of 2016 (+17.1 M). In question, according to the company, the decline in investment income and losses of underwriting higher, primarily because of ongoing challenges in automotive performance.
Since the beginning of the year, the net income decreased by$ 58.8 Million (loss of$ 13.2 Million) over the same period a year ago due to these same factors.
Moreover, Economical reported a combined ratio of 112,8% for the quarter, including an impact of 6.5 percentage points related to Sonnet and the replacement of our system of administration of rules of personal line
A growing trend
«Our second quarter results continue to reflect the trends observed in the first quarter. Although we have generated a significant growth of gross written premiums from personal lines, Sonnet and Petline, underwriting performance of our automobiles continue to be challenged, said Rowan Saunders, president and chief executive officer. To remedy this, we have put in place a number of increases in targeted rates, underwriting and broker management, and will continue to strengthen our executive leadership. We were also affected by difficult weather conditions. «
The gross written premiums for the second quarter of 2017 have increased by 75.2 Million (+12,8%), compared to the same quarter of the previous year, due to a combination of organic growth and inorganic, claims the company.
Premiums from personal lines increased from 69.3 Million (+18.8 per cent), in particular because of the increase in the volumes of car policies and the properties in the chain of brokers of Economical together with the new growth of the direct distribution of digital (Sonnet) and to the acquisition of Petline. The premiums for commercial lines increased by$ 5.9 Million (+2,7%), mainly due to the increase of the activities of the fleet.
During the year, premiums from personal lines increased $ 122.6 Million$ (+19.5%) and the premiums for commercial lines increased $ 14.5 million or 3.8% over the same period last year.
Loss of subscription
The underwriting business for the second quarter of 2017 has generated a loss of 68.4 per M$, which is reflected by a combined ratio of 112,8%, compared to a loss from underwriting of$ 21.6 Million and a combined ratio of 104.5% in the same quarter last year. The results of the subscription were mainly affected by the continued deterioration in performance cars, mainly in Ontario and British Columbia, and by a number of storms of wind and rain which have had an impact of 2.7 percentage points on the combined ratio.
Finally, it is noted that in 2017, the results of the underwriting business of Sonnet have been included in the performance line of the company, which has led to an increase in combined ratios.