Canadian P&C sector remains stable: A.M. Best

Auto personal accident lines are an ongoing concern

Canada’s P&C insurance sector remains stable and shows “profitable operating performance despite ongoing challenges,” according Gordon McLean, a senior financial analyst with A.M. Best.

Related: P&C stable in 2017 but faces significant market pressures: A.M. Best

Speaking at the rating agency’s Canadian Insurance Market Briefing in Toronto on Sept. 6, McLean noted that the Canadian P&C sector is one of the more stable markets in the world, with more than 90 per cent of insurers receiving a superior or excellent rating from A.M. Best.

Seven of the top 10 insurers in Canada reported premium growth in 2016, and the overall combined ratio for the sector increased by 2.7 points to 98.2.

While the Fort McMurray wildfires resulted in significant losses, reinsurers shouldered much of burden, making the catastrophe an overall earnings event for the P&C industry. “Companies generally had losses that were in line with their market shares,” McLean said.

Related: Reinsurers faced accident-year underwriting loss in 2016: A.M. Best

He also noted that Canadian insurers are planning for higher probable maximum loss (PML) levels, adding that “the industry remains exposed to more frequent natural catastrophe losses going forward.”

McLean observed that auto personal accident lines remain in decline, with the loss ratio deteriorating each year since 2012 and the sector susceptible to distracted driving and rising repair costs. However, recent changes to Ontario’s auto insurance regulations that cap claims for medical treatment and recovery could mitigate losses in the province.

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Transcontinental Media G.P.