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Desjardins General Insurance Group reports 2016 fourth quarter and year-end results
LÉVIS, QC, Feb. 28, 2017 /CNW Telbec/ - Desjardins General Insurance Group (DGIG), a Desjardins Group subsidiary specializing in property and casualty insurance, today announced its financial results for the three-month period and year ended December 31, 2016. For the fourth quarter, net income was $170.3 million, compared to $102.3 million in 2015. Return on equity (ROE) was 32.5%, well above the 21.1% recorded in the same period last year. The combined ratio excluding market yield adjustment (MYA) was 62.1%, down 25.9 percentage points from 88.0% in 2015. These solid quarterly results were mainly attributable to the favourable development in loss reserves from previous years, partially offset by amounts owed back to State Farm in connection with the acquisition agreement of its Canadian operations. Direct premiums written were $974.9 million in the quarter, down 1.2% compared to the same period in 2015. The drop in premiums was due to rate decreases in Ontario as a result of the Government's June 1, 2016 auto insurance reform, and to the impact of State Farm auto policies that were converted from 6 to 12 month terms. Those negative impacts were partially offset by organic growth in all regions and lines of business. Year-end results "This past year was notable for the number of major events, including the Fort McMurray wildfires, the most expensive insured catastrophe in Canadian history. In addition, our P&C insurance operations were impacted by severe hail storms in the Calgary area and in Saguenay, Quebec, by heavy rains and flooding in Windsor, Ontario and by numerous other storms across the country," said Guy Cormier, Chair of the Board, President and CEO of Desjardins Group, and Chair of DGIG. "I'm proud of our employees and agents for their committed support of our members and clients through these difficult events, reaching out quickly to help them recover and move on with their lives." Denis Dubois, President and COO of DGIG, said that rising personal auto insurance loss ratios during the year remains a major concern. "Auto results are an issue across the country, largely due to cost inflation. Actions by the governments, regulators and insurers will be required to control rising costs and make sure premiums are aligned with costs." Mr. Dubois said that one of DGIG's more notable achievements in the past year was winning innovation awards for the Ajusto telematics smart phone app, the first in North America, from two prestigious international organizations – the European Financial Management & Marketing Association (EFMA), and Celent, a research and consulting firm focused on the application of information technology in the global financial services industry. "We are just scratching the surface of the potential of connected devices in P&C insurance, which can play a huge role in helping consumers to prevent or mitigate accidents. This reduces their likelihood of going through the difficulties of claim, and could also reduce their premiums," he noted. "Another highlight of the year was the progress we made with the ongoing integration of the operations we acquired from State Farm. Many people, including our employees, State Farm agents and partners, contributed to this exceptional work and also to DGIG's overall 2016 performance for the benefit of our members and clients," said Mr. Dubois.
About Desjardins General Insurance Group Caution concerning forward-looking statements
SOURCE Desjardins Groupe d'assurances générales |