What has been described as “disappointing” numbers on losses across a number of products has one insurer pointing the finger of blame at Mother Nature and Ontario auto.
Economical reported a combined ratio of 108.2 per cent for the third quarter, reflecting a 4.5 percentage point deterioration from the same quarter a year ago, due primarily to disappointing commercial property and liability results and lower favourable prior year loss development performance for Ontario auto.
“Our disappointing third quarter and year-to-date underwriting results reflect difficult weather-related conditions, as well as increases in underlying claims frequency,” said Karen Gavan, Economical’s president and CEO. “The third quarter saw a significant hail event in Airdrie, Alberta combined with a number of other storms throughout the country. Commercial property and liability performance in particular continues to be of concern, and we are continuing to implement both targeted rate increases and underwriting strategies to address profitability.”
The numbers come from Economical’s consolidated financial results for the nine months that ended on September 30.
Economical’s consolidated net income was $900,000 for the third quarter of 2014 compared to $13.8 million during the same period a year ago.
“While we are not satisfied with our underwriting results in 2014,” said Gavan, “we remain confident in the long-term potential of the profitable growth strategies and rating actions we continue to implement.”
Year-to-date net income was $45.5 million compared to $56.5 million for the same period in 2013, with a combined ratio of 103 per cent compared to 99.8 per cent for the previous year, or 100.2 per cent versus 92.8 per cent when excluding weather-related catastrophe losses.
While weather-related catastrophe losses are down from record levels set in 2013, this has been offset by a reduction in favourable prior years' loss reserve development during 2014.
