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Checking In on the Markets

Lloyd's and mortgage default insurer Canada Guaranty were notable market movers in a quiet first half of the year

Every spring, Canadian Insurance Top Broker publishes its Annual Statistical Issue, providing a comprehensive breakdown of how Canadian P&C insurers performed in the previous year. And for the last few Decembers, our year-end issue of the magazine has featured profiles of prominent insurers that we believe brokers should be paying attention to, based on what they have done in the past year.

This year, we decided to marry these two initiatives somewhat by providing you with an update on how some of the top insurers are performing as of the midway point of the fiscal year. Our goal throughout is to provide brokers with the leading market intelligence they need to grow their business, by identifying market leaders and market movers.

This year started off quietly, with an exceptionally mild winter and very little in the way of cat loss activity. Combine this with a slowly improving economy and the Canadian P&C industry showed “marked improvement” in the first six months of the year, according to the MSA Quarterly Outlook Report: Q2 2012.

“Commercial lines writers continued to exhibit impressive bottom line numbers despite continued erosion in top line revenue. The soft commercial market lives on. But, magically, the commercial sector is still able to generate reasonable returns in spite of this and in spite of low investment returns,” says the report.

Among the Top 20 insurers as measured by net written premium at the end of the second quarter, the most notable mover is the Lloyd’s group of underwriters, which finished 2011 in sixth spot but is on track to finish the year in third. Lloyd’s markets enjoyed over $355 million in premium growth compared to Q2 2011, the largest growth by actual volume and eighth largest by percentage with an increase of over 30%. This growth has occurred despite a slowdown in Canadian coverholder appointments and the deregistration of others without active binders.

While not a traditional P&C company, the other notable mover was Canada Guaranty, a mono-line mortgage default insurer that offers a case study in supply chain management. Formerly AIG United Guaranty Mortgage Insurance Company Canada, the company was purchased by the Ontario Teachers’ Pension Plan and National Mortgage Guaranty Holdings Inc., in 2010 and is now the only 100% Canadian-owned private mortgage default insurer. With over 117% premium growth since Q2 2011, the company is benefiting from tightened restrictions on Crown mortgage insurer Canada Mortgage and Housing Corporation (CMHC) and lenders’ diversification strategies.

Since the financial crisis, “[lenders] are very reluctant to put all their emphasis on a sole supplier if indeed that sole supplier, for whatever reason—be it public policy or internal decision making—is unable to accommodate all their needs,” said Canada Guaranty CEO Andy Charles about CMHC in an interview. “When [lenders] do spread [risk] around more evenly, clearly they look to the strength of the sponsorship that Canada Guaranty has. And that’s where Ontario Teachers’ Pension Plan comes into it with assets of $118 billion.”

We hope you find these charts informative and look forward to the full picture in our 2013 Annual Statistical Issue in the spring.

TOP 20 CANADIAN INSURERS Net premium written (thousands) as of June 30, 2012

Rank

COMPANY/GROUP

2012-Q2 Net Premiums Written

1

Intact Insurance Company

 3,245,000

2

Aviva Insurance Company of Canada

 1,709,943

3

Lloyd’s Underwriters

 1,473,030

4

TD Insurance, General Insurance

 1,166,063

5

RSA Canada Group

 1,155,300

6

Wawanesa Mutual Insurance Company (The)

 1,017,160

7

Desjardins General Insurance Group

 987,641

8

Co-operators General Insurance Company

 984,249

9

Economical Mutual Insurance Company

 843,936

10

State Farm Mutual Automobile Insurance Company

 698,861

11

Dominion of Canada General Insurance Company (The)

 600,796

12

Northbridge Insurance

 423,904

13

Allstate Insurance Company of Canada

 379,531

14

Zurich Insurance Company Ltd

 314,050

15

Chartis Insurance Company of Canada

 283,811

16

Chubb Insurance Company of Canada

 279,713

17

La Capitale Assurances Generales Inc.

 271,382

18

Ontario Mutual Insurance Association

 267,687

19

Genworth Financial Mortgage Insurance Company Canada

 255,630

20

RBC General Insurance Company

 239,469

Note: Figures in this report are based on public financials available from OSFI. Every effort has been made to directly contact the companies listed and to confirm the financials presented. Canadian Insurance Top Broker assumes no responsibility for the accuracy of the data provided. All totals are subject to a +/- variance due to rounding.

 

 

 

 

TOP 10 FASTEST GROWING P&C INSURERS ($) Net premiums written (thousands) as of June 30, 2012

 COMPANY/GROUP

2012-Q2 Net premiums written

2011-Q2 Net premiums written

Variance $

 

1

Lloyd’s Underwriters

 $1,473,030

 $1,117,230

 $355,800

2

Desjardins General Insurance Group

 $987,641

 $908,737

 $78,904

3

Aviva Insurance Company of Canada

 $1,709,943

 $1,637,453

 $72,490

4

Allstate Insurance Company of Canada

 $379,531

 $338,130

 $41,401

5

Industrielle Alliance

 $141,401

 $103,786

 $37,615

6

Co-operators General Insurance Company

 $984,249

 $946,957

 $37,292

7

TD Insurance, General Insurance

 $1,166,063

 $1,130,992

 $35,071

8

Canada Guaranty Mortgage Insurance Company

 $59,639

 $27,387

 $32,252

9

Economical Insurance Group

 $843,936

 $812,382

 $31,554

10

Wawanesa Mutual Insurance Company (The)

 $1,017,160

 $986,590

 $30,570

 

 

 

TOP 10 FASTEST GROWING P&C INSURERS (%) Net premiums written (thousands) as of June 30, 2012

COMPANY GROUP

2012-Q2 Net Premiums Written

2011-Q2 Net Premiums Written

Variance %

1

Canada Guaranty Mortgage Insurance Company

 $59,639

 $27,387

117.8%

2

First North American Insurance Company

 $3,171

 $1,466

116.3%

3

Virginia Surety Company, Inc.

 $6,878

 $3,693

86.2%

4

National Liability & Fire Insurance Company

 $86,555

 $56,983

51.9%

5

XL Insurance Company Limited

 $50,004

 $34,504

44.9%

6

Hannover Re

 $93,950

 $67,064

40.1%

7

Industrielle Alliance

 $141,401

 $103,786

36.2%

8

Lloyd’s Underwriters

 $1,473,030

 $1,117,230

31.8%

9

The Mutual Fire Insurance Company of B.C.

 $18,217

 $13,981

30.3%

10

Arch Insurance Company

 $37,888

 $29,647

27.8%

Note: Figures in this report are based on public financials available from OSFI. Every effort has been made to directly contact the companies listed and to confirm the financials presented. Canadian Insurance Top Broker assumes no responsibility for the accuracy of the data provided. All totals are subject to a +/- variance due to rounding.

 

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Copyright 2012 Rogers Publishing Ltd. This article first appeared in the December 2012 edition of Canadian Insurance Top Broker magazine.

 


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