For the second quarter of 2016, the
Desjardins Group recorded a $85 million (2.5%) increase in its operating income, which stood at $3,513 million. Surplus earnings for the group for the same period of time were $427 million before member dividends, a decrease of $202 million on a year-over-year basis.
According to a release from the company, its surplus earnings last year greatly profited from favourable claims experience in the property and casualty segment—the loss ratio reached a historic low of 43.0% in the second quarter of 2015, versus 67.4% for the same quarter this year.
"We're satisfied with these results, particularly given that the results from the same period last year benefited from specific items and were much higher than previous quarters," said Desjardins president and chief executive officer Guy Cormier. "With the new management team now in place, we've committed to ensuring that Desjardins is always simple to do business with, people-focused, modern and high-performing for our members and clients. Lastly, I am thrilled to see that Desjardins is one of the 20 most influential brands in Canada, compelling evidence of our growth and rising profile across the country."
The release also noted that higher premiums in life and health insurance, as well as in property and casualty insurance, generated a $42 million (2.5%) increase in net premiums, which stood at $1,740 million as of Jun. 30, 2016.
The company’s Wealth Management and Life and Health Insurance segment generated net surplus earnings of $124 million for the second quarter of 2016, compared to the $195 million generated in the same quarter last year. This decrease is attributed to the adjustments made last year to actuarial assumptions related to State Farm's life and health insurance activities in Canada.
Desjardins’ Property and Casualty Insurance segment generated $49 million in net surplus earnings for the second quarter of this year. For the same period last year, the segment had $194 million in net surplus earnings. This drop reflects the increased losses on auto insurance claims in Ontario and costs related to the Fort McMurray wildfire, estimated at around $30 million.
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