Optimum Général Inc.

Optimum Général Inc.

February 28, 2005 15:20 ET

Optimum General Inc.'s Profit Continues to Climb in 2004


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: OPTIMUM GENERAL INC.

TSX SYMBOL: OGI.SV.A

FEBRUARY 28, 2005 - 15:20 ET

Optimum General Inc.'s Profit Continues to Climb in
2004

MONTREAL, QUEBEC--(CCNMatthews - Feb. 28, 2005) - Optimum General Inc.
(TSX:OGI.SV.A) reported today that its 2004 net income was $3.6 million
or $0.31 per share, compared to a net income of $2 million or $0.17 per
share the year before. For the fourth quarter, net income amounted to
$383,000 or $0.04 per share, compared to a net income of $1.1 million or
$0.09 per share for the same period last year.

"It is rewarding to see our profit continue to rise" said Mr. David B.
Liddle, President and Chief Operating Officer. "Adequate rates and
strict underwriting discipline along with a declining frequency of loss
have resulted in a loss ratio that continues to improve."

Direct written premiums amounted to $138 million in 2004, compared to
$144.5 million a year earlier. For the fourth quarter, direct written
premiums totalled $33.3 million, compared to $37.5 million for the same
period last year. Premium volume has declined in 2004 due to an
increasingly competitive marketplace.

Net earned premiums for the year 2004 increased to $100.2 million,
compared to $98 million for the previous year, resulting mainly from
less reinsurance ceded. For the fourth quarter, net earned premiums
amounted to $25.4 million, compared to $26.6 million a year earlier.

The Company's claims ratio for 2004 was 54.5%, compared to 58.8% for the
previous year. For the fourth quarter, the claims ratio was 52.6%,
compared to 57.3% for the same period last year.

General expenses amounted to $22.9 million in 2004, representing 16.3%
of direct earned premiums, compared to $22.4 million in 2003,
representing 15.6% of direct earned premiums.

Commissions and taxes amounted to $31.8 million in 2004, representing
22.5% of direct earned premiums, compared to $31.7 million or 22.1% of
direct earned premiums in 2003.

The net expense ratio, consisting of net commissions, taxes on premiums
and operating expenses, increased to 45.7% for 2004 from 43.4% the
previous year. The difference between the direct expense ratio and the
net expense ratio represents the cost of reinsurance which continues to
negatively impact the net expenses.

The combined ratio (claims and expenses) for 2004 improved to 100.2%,
compared to 102.2% for the previous year. For the fourth quarter, the
combined ratio was 104.5%, compared to 100.3% a year earlier.

Optimum General Inc. reported for 2004 an underwriting loss of $237,000,
compared to a loss of $2.2 million for the previous year. For the fourth
quarter, the underwriting loss was $1,150,000, compared to a loss of
$83,000 for the same quarter a year earlier.

Investment income for the year increased to $4.9 million from $4.7
million in 2003 as a result of more invested assets. For the fourth
quarter, investment income was $1.4 million, compared to $1.3 million
for the same period last year.

Optimum General Inc. is a Canadian company that underwrites mainly in
Canada property and casualty insurance through four subsidiaries:
Optimum West Insurance Company in British Columbia, Alberta and the
Yukon; Optimum Frontier Insurance Company in Ontario, Manitoba,
Saskatchewan, the Northwest Territories and the Territory of Nunavut;
Optimum Insurance Company Inc. and Optimum Farm Insurance Inc. in
Quebec. The products of its four subsidiaries are distributed through a
wide network of independent insurance brokers.

Optimum General Inc. is a member company of Optimum Group, a
Canadian-owned international financial group also active in life
insurance, life reinsurance, consulting and financial services.

The Class A subordinate voting shares of Optimum General Inc. trade on
the Toronto Stock Exchange (TSX), under the ticker symbol OGI.SV.A.



Financial Highlights
In thousands of dollars, except per share data

PERIOD ENDED DECEMBER 31
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Three months Twelve months
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2004 2003 2004 2003
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Direct written premiums $33,270 $37,509 $137,963 $144,493
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Direct earned premiums $34,761 $36,852 $141,100 $143,598
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Net earned premiums $25,397 $26,588 $100,213 $98,019
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Net income $383 $1,093 $3,596 $1,996
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Net income per share $0.04 $0.09 $0.31 $0.17
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Combined ratio 104.5% 100.3% 100.2% 102.2%
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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Optimum General Inc.
    David B. Liddle
    President and Chief Operating Officer
    (514) 288-8725
    or
    Optimum General Inc.
    Louis Pontbriand
    Senior Vice-President and Chief Financial Officer
    (514) 288-8725