16 July, 2018 07:00
Economical has had a difficult year in 2017, its CEO Rowan Saunders. Other difficult decisions must be made prior to a return to profitability, he mentioned in the annual report of the mutual.
Economical posted a combined ratio of 113.7% in 2017. The profitability has not been at the rendezvous, the insurer posting a net loss of 92.7 million dollars (M$). Over the past five years, Economical has presented a combined ratio of over 100 % on four occasions. The insurer also shows a loss in its two latest financial years.
How to explain the results of the 2017 ? The losses in motor insurance, for both individuals and companies, are the primary reason, said Mr. Saunders. “The heavy weight of our portfolio in the regulated markets of car insurance ensures that we are disproportionately impacted and exposed in the face of difficult conditions in this market. “
Mr. Saunders says his company has implemented various corrective measures, including pricing and underwriting, but that it will take time to see the results. The Journal of insurance has asked the insurer to see when it anticipated return to the path of profitability. “As Mr. Saunders did not state in the annual report, it is impossible to say for the moment,” replied his spokesperson Sarah Stevens.
50 000 customers in Sonnet
The insurer, however, continues to rack up the volume. He finished 2017 with premiums totaling $ 2.29 billion dollars, or$ 21 Million more in 2016. The insurer derives 6 % of its premiums in Quebec. Mr. Saunders has also revealed that its subsidiary Sonnet, which distributes insurance exclusively via the Web, there were only 50 000 customers at the end of 2017.
Of its 50,000 customers, how many were from Quebec ? The insurer said they wouldn’t be able to do the calculation, said his spokeswoman Sarah Stevens.
The volume of premiums for the Sonnet has reached$ 71 Million at the end of 2017. It was$ 12 Million in 2016. In Quebec, the volume of Sonnet was$ 4.4 Million at the end of 2017, compared to 811 000 $ a year earlier.