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Loss ratio for Canadian commercial insurers deteriorates in accident year 2016 compared to same period in 2015: Willis Towers Watson survey


January 11, 2017   by Canadian Underwriter


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Reported claim cost information for Canadian commercial insurers reveals a deterioration in loss ratio of 38.4% in accident year 2016 compared to the same period in 2015, according to Willis Towers Watson’s (WTW) Commercial Lines Insurance Pricing Survey – Canada (CLIPS Canada).

Businessman calculating and checking articles of agreementReleased on Wednesday, CLIPS Canada summarized aggregate results for the third quarter of 2016. The most recent survey compared prices charged on policies underwritten during the third quarter of 2016 to those charged for the same coverage during the same quarter in 2015. For the most recent survey, data was contributed by six Canadian insurers/groups, representing close to 20% of the Canadian commercial insurance market, information from WTW said.

Once per quarter, participating companies provide premium volume, changes in prices for the latest quarter for each of the surveyed commercial lines of business they write, as well as their estimate of the changes in loss costs for that business.

Among the aggregate findings – which are intended to exclude catastrophes:

    • Survey respondents reported a 2.1% written premium price level increase during the third quarter of 2016;
    • Commercial insurance prices in aggregate have been increasing marginally for most of the past three years;
    • The increase was highest in the third quarter 2014 at 3.5%. Since the third quarter of 2014, the magnitude of the price level increase had been gradually decreasing until the third quarter of 2015, which showed a very marginal -0.4%; the second and third quarters of 2016 show increases higher than the corresponding quarter of 2015;
    • Price increases were reported for all reported lines. Survey respondents reported the largest price increases in the commercial property line at 2.5%;
    • Price changes for all lines were in the low- to mid-single digits;
    • Reported claim cost information reveals a deterioration in loss ratio of 38.4% in accident year 2016 compared to the same period in 2015. “The change in loss cost is driven by unusual data points in large account commercial property and unpublished lines,” a WTW spokesperson told

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    ; and

  • Carrier estimates of the claim cost change underlying the loss ratio movement is -0.3% for accident year 2015 and 36.8% for 2016 for the aggregate of the participants.