ICPEI HOLDINGS INC. Highlights
- Net income from continued operations of
$4.9 million for 2020 compared to a loss of$0.3 million for 2019 and$0.5 million in Q4 2020 compared to a loss of$0.03 million in Q4 2019. - Net income per share on continued operations of
$0.35 per share for 2020 compared to a net loss of$0.01 per share for 2019. Net income per share on continued operations of$0.02 per share for Q4 2020 compared to$0.01 per share for Q4 2019. - Combined ratio improved from 104.8% in 2019 to 93.2% in 2020 and from 109.5% in Q4 2019 to 94.9% in Q4 2020 largely due to growth in premium and lower frequency of claims.
- A 17% increase in Direct Written Premiums in 2020 over 2019 and 35% increase in Q4 2020 over the same period in 2019 as a result of growth in both the Personal and Commercial Lines. Company also started writing business in
Quebec in Q4 2020. - Closing book value per share of
$1.59 compared to$1.55 at the end of the third quarter. The increase from the third quarter is the results of$0.02 from earnings per share in the fourth quarter and$0.02 from increase in accumulated other comprehensive income. - The financial information below compares three and twelve months ended
December 31, 2020 results with the same periods in 2019.
3 months ended | 12 months ended | |||
($ THOUSANDS except per share amounts) | 2020 | 2019 | 2020 | 2019 |
Direct written and assumed premiums | 11,619 | 8,629 | 43,188 | 36,829 |
Net earned premiums | 10,141 | 8,573 | 37,012 | 32,397 |
Net claims incurred | 5,423 | 6,971 | 19,913 | 22,898 |
Net acquisition costs | 2,428 | 1,737 | 8,918 | 6,969 |
Operating expenses | 1,772 | 674 | 5,675 | 4,094 |
Corporate expense | 558 | 448 | 1,365 | 1,675 |
Underwriting income (loss) (1) | 518 | (811) | 2,506 | (1,564) |
Investment income (2) | 783 | 1,083 | 4,795 | 2,942 |
Impact of change in discount rate on claims | (241) | (71) | (342) | (457) |
Net income (loss) before income taxes | 502 | (245) | 5,594 | (754) |
Income tax expense (recovery) | 33 | (213) | 698 | (449) |
Net income (loss) on continuing operations | 469 | (32) | 4,896 | (305) |
Net income (loss) on discontinued operations | - | (498) | (5,866) | 45,722 |
Net income (loss) | 469 | (530) | (970) | 45,417 |
Net income (loss) attributed to: | ||||
Shareholders of the Company – continuing operations | 272 | 157 | 4,149 | (127) |
Shareholders of the Company – discontinuing operations | - | (498) | (5,866) | 45,722 |
Non-controlling interest – continuing operations | 197 | (189) | 747 | (178) |
Earnings per share | ||||
Continuing operations | ||||
Basic | ||||
Diluted | ||||
Discontinued operations | ||||
Basic | - | |||
Diluted | - | |||
(1) | Underwriting income excludes impact of change in claims discount rates and corporate expenses. |
(2) | Investment income consists of interest income, dividend income, and realized gains less investment expense. |
Underwriting Results:
Underwriting | 3 Months ended | 3 Months ended | 12 Months ended | 12 Months ended |
Personal Lines | 1,256 | (897) | 2,952 | (2,271) |
Commercial Lines | (738) | 86 | (446) | 707 |
Key Ratios | ||||
Loss Ratio | 53.5% | 81.4% | 53.8% | 70.7% |
Expense Ratio | 41.4% | 28.1% | 39.4% | 34.1% |
Combined Ratio | 94.9% | 109.5% | 93.2% | 104.8% |
Loss Ratios | ||||
Personal Lines | 41.2% | 88.1% | 49.5% | 77.0% |
Commercial Lines | 78.9% | 68.1% | 63.4% | 57.6% |
Capital Management
The Minimum Capital Test ("MCT") ratio of EFH's subsidiary,
COVID-19 Pandemic Update
Since
ICPEI continued to provide a number of accommodations to its policyholders if they experienced hardship because of COVID-19 and adjusted their auto premiums due to reduction of use. ICPEI has only experienced a minor increase in the number of customer defaults and very few requests to lower monthly premiums based on lower usage of vehicles. These did not have a significant impact on the results of the Company.
Non-IFRS Financial Measures
EFH uses both IFRS and certain non-IFRS measures to assess performance. Securities regulators require that companies caution readers about non-IFRS measures that do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures used by other companies. EFH analyzes performance based on underwriting income and underwriting ratios such as combined, expense and loss ratios, which are non-IFRS measures. Underwriting income is defined as net earned premiums less net claims incurred, net acquisition costs, operating expenses, and excludes any impact of change in discount rate on claims and corporate expenses. Loss ratio is net claims incurred divided by net earned premiums. Expense ratio is net acquisition costs plus operating expenses divided by net earned premiums. Combined ratio is the sum of loss ratio and expense ratio.
Forward-looking Information
This news release contains forward-looking information based on current expectations. This information includes, but is not limited to, statements about the operations, business, financial condition, priorities, targets, ongoing objectives, strategies, litigation outcomes and outlook of EFH. These statements, which appear in this press release 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.
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a projection as reflected in the forward-looking information. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific. A variety of material factors, many of which are beyond EFH's control, affect the operations, performance and results of its business and could cause actual results to differ materially from the expectations expressed in any of this forward-looking information.
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