Desjardins Group reports 36% increase in surplus earnings

For the second quarter ended June 30, 2017, Desjardins Group reports an 11.4% increase in operating income, to $3.9 billion.

Subsequently, Desjardins Group reached $581 million in surplus earnings before member dividends, up $154 million (36%) from the same quarter of 2016. In a release, the firm says the increase is due to the contribution of the caisse network, positive investment performance and a decrease in actuarial liabilities arising from changes made to the credit ratings of the securities matched to these liabilities in wealth management and life and health insurance. Further, property and casualty insurance benefited from favourable developments in prior years’ claims.

Growth in life and health insurance operations and in property and casualty insurance, combined with the impact of the reinsurance treaty signed as part of the acquisition of the Canadian operations of State Farm, led to a 19.3% increase in net premiums, to $2.08 billion (Q2 2016: $1.74 billion).

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Income from brokerage and investment fund services stood at $307 million (Q2 2016: $286 million). This growth was primarily due to greater assets under management arising from the sale of various financial products.

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Wealth management, life and health insurance

Net surplus earnings generated by wealth management and life and health insurance were $189 million at the end of the quarter (Q2 2016: $124 million). This 52.4% increase was largely due to good investment performance and, as stated above, the decrease in actuarial liabilities arising from changes made to the credit ratings of the securities matched to these liabilities.

For the first six months of 2017, surplus earnings in this segment totalled $332 million (2016: $221 million), reports Desjardins.

As at June 30, 2017, Desjardins Group had total assets of $272.0 billion, up $13.6 billion or 5.3% since December 31, 2016. The increase was largely due to growth in the securities portfolio and the net loans and acceptances portfolio.

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