http://autoinsurancereview.tk/wp-content/uploads/2016/11/economical-238x143.jpg
Economical reports Q3 and year-to-date results
Increased gross written premiums by 6.7% over third quarter.
Staff on November 7, 2016
Economical Insurance has announced consolidated financial results for the three and nine month periods ended September 30, 2016.
Gross written premiums for the third quarter 2016 grew by $34.4 million or 6.7% over the same quarter a year ago. Personal lines premiums grew by $13.5 million or 3.9% driven primarily by increased auto policy volumes. Commercial lines premiums grew by $20.9 million or 12.6% over the same quarter a year ago driven by targeted rate increases for commercial property, increased fleet business and the earlier renewal date of certain large accounts. Year-to-date, personal lines premiums grew by $40.6 million or 4.3% and commercial lines premiums grew by $11.4 million or 2.0% over the same period a year ago.
“Our third quarter results were significantly impacted by a number of different factors,” said John Bowey, board chair, in a statement.”Heightened storm activity resulted in Economical incurring catastrophe losses in six separate events during the quarter. We also saw a sizeable increase in large losses, primarily in our commercial property and liability line of business, and increases in claims frequency and severity.
Underwriting activity for the third quarter 2016 produced a $79.3 million underwriting loss, resulting in a combined ratio of 116.1% compared to underwriting income of $48.9 million and a combined ratio of 89.8% in the same quarter a year ago. Catastrophe and large losses impacted the combined ratio by 12.9 percentage points in the quarter compared to 5.0 percentage points in the same quarter a year ago.
There was also an increase in claims frequency and severity, which we are monitoring closely. Comparatively, the third quarter of 2015 benefited from relatively benign weather conditions and increased levels of favourable claims development that arose from one-time regulatory reforms which reduced reserves for certain open claims.
The firm continues to make significant investments in Sonnet, supporting infrastructure, and the replacement of its policy administration system which impacted the third quarter 2016 expense ratio by 7.6 percentage points compared to 2.1 percentage points in the same quarter a year ago.
Year-to-date, underwriting activity produced a $106.3 million underwriting loss, resulting in a combined ratio of 107.3% compared to underwriting income of $41.7 million and a combined ratio of 97.1% in the same quarter a year ago. Year-to-date, our underwriting results were significantly impacted by increased catastrophe and large losses, including the Fort McMurray wildfire, an increase in claims frequency and severity and increased spend on our strategic investments.
The personal auto combined ratio was impacted by higher catastrophe and large losses and an increase in claims frequency. The third quarter of 2015 benefited from increased levels of favourable claims development that arose from one-time regulatory reforms which reduced reserves for certain open claims, resulting in a 10.1 percentage point reduction on the combined ratio. The personal property combined ratio increased due to higher catastrophe losses, resulting in a 18.0 percentage point increase on the combined ratio, and an increase in claims severity, which was partially offset by higher average premiums. Overall, personal lines produced an underwriting loss of $21.1 million compared to underwriting income of $37.4 million in the same quarter a year ago. Year-to-date, personal lines produced underwriting income of $3.3 million compared to $62.6 million in 2015.
The commercial auto combined ratio was impacted by higher claims severity and an increase in claims frequency whereas the third quarter of 2015 benefited from the same one-time regulatory reforms which impacted personal auto, resulting in an 11.9 percentage point reduction on the combined ratio. The commercial property and liability combined ratio increased due to significantly higher large losses, resulting in a 17.6 percentage point increase on the combined ratio, partially offset by an increase in average premiums due to our underwriting and pricing actions. Overall, commercial lines produced an underwriting loss of $21.8 million compared to underwriting income of $21.5 million in the same quarter a year ago. Year-to-date, commercial lines produced an underwriting loss of $36.4 million, compared to underwriting income of $3.9 million in 2015.
Economical reports Q3 and year-to-date results
No comments:
Post a Comment