Economical Insurance reports first quarter 2021 financial results

Economical Insurance reports first quarter 2021 financial results

Economical Insurance reports First Quarter 2021 financial results (CNW Group/Economical Insurance) WATERLOO, ON, May 14, 2021 /CNW/ – Economical Insurance today announced consolidated financial results for the three months ended March 31, 2021. “We reported low-90s combined ratios in all three lines of business, resulting in an overall COR of 91.3% and underwriting income that was $70 million higher than a year ago. The improvement was driven by a reduction in claims frequency from reduced driving activity related to COVID-19, and ongoing actions to enhance profitability in commercial lines. Continued firm market conditions in property and most commercial lines, our strategic investments in digital platforms and talent, and our disciplined approach to pursuing growth opportunities have combined to deliver a 14.3% increase in premiums in the first quarter,” said Rowan Saunders, President & CEO. “We are pleased with results in our digital direct business, Sonnet, which is making great progress as it continues to mature its business model, consolidate its customer base, and position for future growth. I believe we have built a solid base in advance of our planned demutualization later this year, which will be voted upon next week.”

Net investment income declined $3.6 million in the quarter, a headwind to performance that is expected to persist given low fixed income yields Benefits from underwriting actions and a reduction in auto claims frequency led to a combined ratio of 91.3%, representing a substantial year over year improvement of 10.8 points

Strong underwriting results drove net income of $82.4 million, bolstering our already solid financial position with total equity approaching $1.9 billion and MCT at 275% Gross written premiums increased 14.3% versus the first quarter of 2020, reflecting firm market conditions and our strategic expansions in Sonnet, commercial lines, and personal property

Economical Insurance Consolidated Highlights ($ in millions, except as otherwise noted) Three months ended March 31 “Looking ahead, we are continuing to provide relief across the business to support customers in need while continuing to drive growth strategically across our lines of business. While our recent profitability has been strong, the impact of our customer relief actions will take time to fully impact our results,” noted Saunders. “We maintain our focus on prioritizing the health and safety of our employees, actively managing the evolving human and financial impact this pandemic continues to have, and meeting the needs of our customers and broker partners.”

“The combination of $240 million in net income and a rebound in capital markets since the first quarter of 2020 has led to an increase in total equity of more than $350 million in that period – now approaching $1.9 billion for the first time,” stated Philip Mather, EVP & CFO. “Increased cash generation from our improved underwriting results and strong premium growth should facilitate mitigating the impact of low fixed income yields in upcoming quarters.” Story continues

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