Definity Financial Corporation has released its financial results for the first quarter of 2025, reporting a 7.8% increase in gross written premiums (GWP) compared to the same period last year.
Total GWP for the quarter rose by $74.5 million year-on-year, with growth recorded across all business lines.
When excluding premiums from the exited Sonnet Alberta personal auto portfolio in both periods, overall GWP growth was 9.6%. Personal lines GWP increased 6.7%, or 9.3% excluding the exited line, supported by growth in both auto rates and unit volumes, alongside continued pricing adjustments in property.
Commercial lines GWP rose 10.0%, driven by prevailing market conditions, particularly within the company’s small commercial and specialty segments.
Definity reported underwriting income of $55.0 million for the quarter, up slightly from $54.8 million in Q1 2024. The combined ratio stood at 94.5%, compared to 93.9% in the prior-year period.
Earlier in the quarter, Definity revised its guidance, indicating that catastrophe losses would significantly impact operating income. The company estimated losses of approximately $50 million, net of reinsurance recoveries, equivalent to about $0.32 per common share after tax. This figure was roughly twice the company’s historical first-quarter average.
The revised estimates were linked to a series of extreme weather events throughout the quarter, including heavy snow, rain, and an ice storm. The events caused roof collapses, water infiltration, and widespread property damage across Ontario, Quebec, and Atlantic Canada.
The ice storm in late March led to power outages and disrupted thousands of homes and businesses. Definity’s loss projections were based on initial customer reports and internal exposure analysis.
Net investment income in Q1 2025 increased by $1.6 million year-on-year, attributed to higher interest income stemming from increased bond holdings. Distribution income rose to $11.0 million, up from $10.0 million in Q1 2024, primarily due to recent acquisitions and continued organic growth.
Net income attributable to common shareholders was $92.0 million, down from $105.2 million in the first quarter of 2024. The decline was primarily driven by lower gains on common stocks, though this was partially balanced by gains on bonds.
Operating net income remained stable at $75.9 million, compared to $76.1 million in the same quarter last year. The company reported an operating return on equity (ROE) of 10.3% for the twelve months ending March 31, 2025, up from 9.5% in the comparable period a year earlier.
The increase in operating ROE reflected growth in operating net income that outpaced the rise in average adjusted equity, excluding accumulated other comprehensive loss.
Rowan Saunders (pictured above), president and CEO of Definity, said that firm market conditions in personal insurance and favourable dynamics in commercial lines, combined with the company’s broker strategy, supported GWP growth.
“I am pleased with the encouraging start to the year and am confident that we will deliver on our 2025 financial targets, while advancing our strategic objectives. We have repeatedly demonstrated the resilience of our organization and have great confidence in our ability to become a top five P&C insurer,” Saunders said.
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