Levis, Quebec — March 13, 2014 — For the year ending Dec. 31, 2013 Desjardins’ insurance division posted a net income increase of 7.8 percent between 2012 and 2013, rising from $181.1 million to $195.2 million.
The report notes that Return On Equity (ROE) was 19.0 percent, ranking the company among the best in the industry.
Direct written premiums increased by 6.7 percent to $2.1 billion, and the number of policies in force rose by more than 63,500, reaching nearly 2.2 million. These increases were achieved entirely through organic growth.
The combined ratio improved by 2.9 percentage points to 91.7 percent, compared to 94.6 percent in 2012. This was largely due to the 3.8 percentage point improvement in loss ratio.
Fourth Quarter Results
The fourth quarter was very positive, with net income of $81.8 million, an increase of 35.2 percent compared to the same period in 2012. In addition, direct written premiums increased by 8.1 percent from the corresponding quarter in 2012 due to increased marketing activity and the impact of the Ajusto and Intelauto usage based insurance programs.
“DGIG had an outstanding year, particularly considering the major flooding and other weather-related catastrophic events across the country,” says Monique F. Leroux, Chair of the Board, President and CEO, Desjardins Group. “I am very proud that our P&C insurance companies were there for our members and clients when they needed us most, whether it was with the flooding in the Calgary area or Toronto, or the tragic rail disaster in Lac-MÃ©gantic, QuÃ©bec.
“DGIG had a strong fourth quarter both in terms of growth and profitability, and this gave a boost to our overall results for the year,” said Sylvie Paquette, President & COO, Desjardins General Insurance Group. “We have significant growth momentum with our existing operations and are in a solid financial position.”
Leroux also commented on the recent announcement concerning the agreement to purchase State Farm Canada’s businesses in property and casualty and life insurance, as well as its Canadian mutual fund, loan and living benefits companies. Under the agreement, State Farm in the U.S. and CrÃ©dit Mutuel, a major European financial cooperative and partner of Desjardins, will each make a substantial investment in DGIG.
Paquette says the biggest challenge over the next several years will be planning for and integrating State Farm Canada’s businesses. The ongoing involvement and significant financial investment by U.S.-based State Farm in DGIG once the acquisition is finalized will help contribute to a smooth transition and the longer-term success of the combined organization.
Over the long term Paquette would like to see the P&C insurance industry work with government and other stakeholders to develop a more stable, sustainable and affordable auto insurance market in Ontario and to address the major earthquake and the increasing overland flooding risks in Canada.