By: Luke Jones, Published on August 8, 2018 07:05 AM, Last Update on August 8, 2018 04:06 AM
Economical Insurance continues to be burdened by cat events as the insurer posted its second quarter financial results. The company says it generated a net loss of $25.1 million during the last frame (ending June 30, 2018). In its earnings call, Economical put the blame on high catastrophe losses.
“Unfortunately, like many in the industry, we were heavily impacted by severe weather events in Ontario and Quebec, relating to wind, ice, and rain during the second quarter. We incurred catastrophe losses of $48.2 million, which were substantially higher than historic levels, for this time of year, and the $14.3 million incurred in the same quarter a year ago,” said CEO and president Rowan Saunders in a statement.
While Economical failed to turn a profit, the company revealed gross written premiums are back in growth, increasing 1.4% ($8.9 million). Breaking down the financials, personal lines increased $38.1 million, a growth of 8.7%. The company says this return to growth is mostly due to business growth from its Sonnet digital direct platform.
Rate increases in personal auto and more personal property business also contributed to Economical’s written premiums growth.
“While we are encouraged to see signs of improvement in our top line growth and underlying claims performance compared to recent periods, we are continuing to implement a number of corrective actions to address our underlying underwriting performance. These corrective actions significantly impacted gross written premiums, particularly in commercial lines, but are necessary as we seek sustained profitability and improved business mix,” Saunders said.