La Capitale Insurance and Financial Group’s life and health insurance and financial services business posted net income of $2.3 million in 2016, announced the mutual insurer April 3. This is a sharp drop from $14.6 million net income reported for its life and health business in 2015 and $36 million in 2014.
“Many initiatives have already been introduced to turn this situation around and strengthen the market position of the Life and Health Insurance and Financial Services sector. These include investments in technological infrastructures and concrete measures for improving processes and containing costs in the Group Insurance sector,” said La Capitale in a statement.
Last week, we reported that Steven Ross left his position of President and Chief Operating Officer of La Capitale Insurance and Financial Services effective March 30. In the mutual’s 2016 annual report, the Year in Review message from Ross explains that two elements substantially reduced the life and health business profitability: “a marked increase in group insurance prescription drug and disability benefits and a significant reinforcement of our actuarial reserves.”
P&C business boosts overall results
Thanks to the stronger performance of its property and casualty insurance business, the mutual insurer’s overall results were more solid. La Capitale posted consolidated net income of $45.2 in 2016, compared to $55.4 million for 2015. Return on equity was 5.0 per cent for 2016, down from 6.4 per cent in 2015.
Jean St-Gelais, Chairman of the Board and Chief Executive Officer of La Capitale Civil Service Mutual, told the La Capitale’s AGM held on April 3 that the P&C sector’s “outstanding performance compensated for the difficulties encountered by the Life and Health Insurance and Financial Services sector, which again proves that the diversification of La Capitale's operations, the strength of our distribution networks, our presence in numerous markets and the quality of our employees are invaluable advantages."