Co-operators General Insurance Company reported stronger financial performance for the second quarter of 2025, with higher net income and solid premium growth.
However, underwriting results were tempered by increased claims costs and major weather-related events.
Net income for the quarter ended June 30 rose to $149.7 million, up from $95.7 million in the same period last year.
The company reported earnings per common share of $5.35, compared to $3.36 in Q2 2024.
Direct written premium (DWP) for the quarter reached $1.64 billion, representing an 8.3% increase from the previous year.
Net insurance revenue (NIR) also grew by 13.9% to $1.35 billion, driven by a combination of higher average premium rates and expansion in the number of active policies and insured vehicles, with notable contributions from the auto and home portfolios and the Ontario region.
Rob Wesseling, president and CEO of Co-operators, said the company continued to advance its strategic initiatives, despite ongoing challenges in the market and adverse weather activity.
“The second quarter of 2025 was impacted by major weather events and persistent volatility in the market. Through focused adherence to our strategic plan, we achieved premium growth, positive investment portfolio returns, and concluded the quarter with strong financial results,” he said. “From our position of capital strength, we will continue to focus on investing in solutions that help Canadians build their financial security and resilience.”
Underwriting income, excluding adjustments for discounting and risk, was reported at $63.9 million, down from $75 million in the second quarter of 2024. The decrease was attributed to higher claims and operating costs.
Net undiscounted claims and adjustment expenses rose by $133.3 million, while acquisition and other costs increased by $42.4 million.
According to the company, the rise in claims was largely due to severe weather incidents and current-year losses.
These impacts were partly offset by favourable development on claims from previous years.
The growth in premiums also contributed to higher related expenses, including premium taxes and commissions.
The combined ratio, also excluding discounting and risk adjustments, increased to 95.3% from 93.8% in the same quarter of the previous year.
Investment income contributed significantly to the company’s overall results.
Net investment income and gains totalled $117.8 million in Q2 2025, compared to $63.9 million in Q2 2024.
The investment and finance result improved by $84.9 million year-over-year, yielding $83.5 million in income this quarter, compared to a $1.4 million loss in the same period last year.
The company attributed this improvement to gains in equity investments and a decrease in finance expenses related to insurance and reinsurance contracts.
The latter was influenced by a shift in the yield curve, which reduced the present value of insurance liabilities.
The insurer’s investment portfolio remained heavily weighted toward Canadian securities, with 81.6% of its equity assets in Canadian stocks.
Credit quality also remained high, with 96.9% of bond holdings rated investment grade and 76.2% rated A or above.
Co-operators General reported a minimum capital test (MCT) ratio of 228% at the end of the second quarter, unchanged from the prior quarter and well above required levels.
Shareholders’ equity grew to $3.04 billion from $2.81 billion a year earlier.
The company stated that its liquidity and capital positions remain robust and aligned with regulatory expectations.
Earlier in the year, Co-operators posted a lower net income of $72.9 million for the first quarter of 2025 (Q1 2025), down from $93.8 million in Q1 2024.
The decrease was largely the result of increased claims activity, which led to an underwriting loss of $22 million, compared to $5.8 million in the same period a year earlier.
DWP in the first quarter increased by 11.8% to approximately $1.25 billion, and NIR rose 15.5% to $1.3 billion.
However, net investment income fell to $74 million, down from $82.6 million, due to unrealized losses in both common and preferred share portfolios.
As of March 31, the MCT stood at 222%, remaining above both regulatory and internal benchmarks.
