The Economical Insurance Group’s 2010 net income increased 167%
Canadian Property and Casualty insurance company The Economical Insurance Group announced its 2010 year-end results, including a net income of $64.4 million, an increase of 167 percent from 2009. Economical says this increase is primarily due to improved underwriting results.
Economical’s combined ratio decreased to 103.3 percent from 107.9 percent in 2009 and achieved a 7.5 point improvement in its claims ratio. The Group’s year-end total policyholders’ equity was $1,258 million, a 7.5 percent increase from 2009.
2010 Consolidated Highlights:
($ in millions, except as otherwise noted)
| 2010 | 2009 | |
| Gross written premiums | 1,722.0 | 1,826.3 |
| Claims ratio | 69.7% | 77.2% |
| Combined ratio | 103.3% | 107.9% |
| Underwriting loss | 55.7 | 143.9 |
| Investment income | 147.7 | 165.7 |
| Net income | 64.4 | 24.1 |
| Policyholders’ equity | 1,258.0 | 1,170.7 |
The company said that its mix of business between personal lines and commercial lines shifted slightly in 2010, with commercial lines representing 38 percent of its gross written premiums, compared to 36 percent in 2009. Personal automobile insurance business declined from 45 percent to 42 percent “directly as a result of The Group’s strategy to reduce overall exposure to unprofitable personal auto business, particularly in Ontario and the greater Toronto area,” it said.
“Economical’s improved 2010 results reflect the successful implementation of strategic initiatives focused on profitability rather than revenue. The Group increased net income by $40.3 million, with a $104 million reduction in gross written premiums. Underwriting results improved by $88.2 million in 2010, due to Economical’s initiatives, which included better broker management and underwriting discipline, achieving rate increases, and targeting our most profitable business segments. While the performance of the Ontario automobile insurance business continues to be unsatisfactory, all other business segments across the country are demonstrating positive trends,” said Katherine Mabe, President and Chief Executive Officer of The Economical Insurance Group, in a statement.
“With one of the strongest capital positions in our history, and building on the successful strategic actions taken in 2010, The Economical Insurance Group is well positioned for a period of sustained profitable growth,” she added.
