CO-OPERATORS GENERAL INSURANCE COMPANY REPORTS THIRD QUARTER 2022 RESULTS

This quarterly earnings news release should be read in conjunction with our third quarter 2022 unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2021 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.

GUELPH, ON, Nov. 4, 2022 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended September 30, 2022. The consolidated net income was $92.9 million compared to net income of $86.8 million for the same quarter in 2021. This resulted in earnings per common share of $3.42 for the quarter, compared to earnings per share of $3.20 in the same period last year.

"Hurricane Fiona had a devastating impact on our clients and we are working diligently to support them. The affordability of insurance and access to adequate protection will continue to be an issue as climate change impacts increase in frequency and severity. As this gap widens, we need to focus on prevention as well as protection," said Rob Wesseling, CEO of Co-operators. "Even with increases in insured losses, and the negative impact of rising interest rates on our investment portfolio, we are confident our strong capital position and the resilience of our co-operative will enable us to continue working towards our long-term vision to invest in resilient, sustainable communities and provide financial security for Canadians."

CO-OPERATORS GENERAL'S THIRD QUARTER FINANCIAL HIGHLIGHTS

($ in millions except for earnings per share and ratios)

THIRD QUARTER REVIEW

The third quarter of the year saw DWP increase by 6.8% or $75.0 million compared to the same quarter of 2021 due to increases in policies in force in the auto and commercial lines of business, combined with higher average premiums in the commercial, home, and farm lines of business. Travel DWP has also rebounded as the result of easing of pandemic restrictions worldwide. NEP increased during the third quarter by 4.5% or $44.0 million compared to the comparative quarter, which was primarily attributable to the commercial and home lines of business combined with the rebounding in the travel line of business.

Undiscounted net claims and adjustment expenses increased by $70.5 million compared to the same quarter of 2021 resulting in a deterioration of our loss ratio excluding MYA of 4.3 percentage points to 64.8%. The increase in undiscounted net claims and adjustment expense was primarily attributable to increases due to Hurricane Fiona which swept through the Atlantic provinces on September 24, 2022. Our expense ratio of 33.1% remained relatively stable compared to the third quarter of 2021, as increased strategic initiative spend and staffing costs were offset by increased net earned premium. Consequently, our combined ratio excluding MYA increased to 97.9% in the quarter, an increase of 4.2 percentage points compared to the same period last year due to the impact of Hurricane Fiona.

During the third quarter, a rise in interest rates significantly impacted our results and financial position. The discount rate used to measure our claims liabilities increased in the quarter resulting in a favourable MYA of $20.3 million. The increase in discount rate was larger than the increase in the comparative quarter and, as a result, there was a favourable MYA increase of $18.0 million.

Net investment income and gains of $79.5 million were recognized in the third quarter. The increase of $30.9 million compared to the third quarter of 2021 was primarily driven by realized gains on common equities and higher interest income. Higher unrealized preferred share losses and unfavourable foreign exchange rates partially offset the gain. Year to date net investment income of $139.7 million was partially offset by $76.6 million of net investment losses leading to total net investment income and gains of $63.1 million.

Our balance sheet, liquidity and capital positions remain strong and enable us to continue to serve and meet the needs of our clients while also supporting our strategic areas of focus. Our investment portfolio is composed of high quality and well diversified assets. The credit quality of our portfolio remains high with 97.2% of our portfolio considered investment grade and 84.9% rated A or higher. Our equity portfolio is 84.6% weighted to Canadian stocks.

CAPITAL

Co-operators General's capital position remains strong, as the Minimum Capital Test for Co-operators General was 238% at September 30, 2022, well above internal and regulatory minimum requirements.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements and forward-looking information, including statements regarding the operations, objectives, strategies, financial situation and performance of Co–operators General. These statements generally can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "would", "should", "could", "trend", "predict", "likely", "potential" or "continue" or the negative thereof and similar variations. These statements are not guarantees of future performance and involve known and unknown risk, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements or information, including the impact of the COVID-19 pandemic on our investments, operations and claims negatively affecting the results of our operations and financial position. Although we believe that the expectations reflected in the forward-looking statements and information are reasonable, there can be no assurance that such expectations will prove to be correct. Consequently, we make no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements and information. For further information, refer to our third quarter 2022 MD&A or our 2021 Annual Report.

ABOUT US

Co-operators General is a leading Canadian multi-product insurance company and is part of
The Co-operators Group Limited (Co-operators). Co-operators is a leading Canadian financial services co-operative, offering multi-line insurance and investment products, services, and personalized advice to help Canadians build their financial strength and security. The company has more than $61.5 billion in assets under administration. Co-operators has been providing trusted guidance to Canadians for the past 76 years. The organization is well known for its community involvement and its commitment to sustainability. Achieving carbon neutral equivalency in 2020, the organization is committed to net-zero emissions in its operations and investments by 2040, and 2050, respectively. Co-operators is also ranked as a Corporate Knights' Best 50 Corporate Citizen in Canada. For more information, please visit: www.cooperators.ca.

Co-operators General Class E, Series C Preference Shares trade under ticker symbol CCS.PR.C on the Toronto Stock Exchange (TSX). Further information can be found at www.cooperators.ca.

For further information:
Investor Relations
Lesley Christodoulou, Vice-President, Corporate Finance Services
Telephone: 1-888-767-3909 Ext: 302493
Email: lesley_christodoulou@cooperators.ca

Media Relations
Email: media@cooperators.ca

SOURCE The Co-operators Group Limited

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