Current Year and Expected
Corporate
Corporate operating results show an improvement compared to expected results. Net income of $37.3 million exceeded expected results of $0.2 million by $37.1 million.

Increases in investment income and total earned revenues of $55.2 million and $9.1 million respectively were partially offset by higher than expected claims costs of $24.2 million and expenses of $3.0 million.

Basic
Net income of $3.4 million was $4.6 million more than expected.

Claim costs exceeded expectations by $44.8 million. This variance is primarily associated with an increase in the number of serious losses that occurred in 2003. Also contributing to the higher than expected claims costs was a rise in the severity of the average PIPP claim from $2,529 to $3,472, an increase of 37.3 per cent.

Positive returns on the corporation’s equity portfolio contributed to a $47.0 million increase in investment income compared to an expected amount of $61.5 million.

Extension
Net income of $8.0 million was $8.2 million more than the target.

Earned revenues and expenses did not vary significantly from expected targets. Claims costs, however, decreased, showing an improvement to the target of $4.2 million. A lower than anticipated claims severity for comprehensive claims was the primary factor.

Positive returns on the corporation’s equity portfolio contributed to a $3.3 million increase in investment income compared to an expected amount of $5.6 million.

Special Risk Extension
Net income of $25.1 million was $23.6 million more than expected.

Claims costs were less than expected by $15.9 million. The positive variance is attributable to a decrease in the severity of liability claims associated with favourable development on claims that occurred in prior years. This line of business is especially susceptible to large losses and the favourable results experienced this year are not expected to continue next year.

Positive returns on the corporation’s equity portfolio contributed to a $4.8 million increase in investment income compared to an expected amount of $6.7 million.

...Results of Operations > Current Year and Expected > Investment Income