Canadian P&C underwriting results in 2009 Q1 show marginal improvement: MSA Research

The weather in 2009 Q1 was not as bad as it was during the same period last year, but the underwriting results of Canadian property and casualty industry took a beating nonetheless, according to the 2009 Q1 MSA/Baron Outlook Report.
According to MSA, the industry’s net income was Cdn$322.3 million in 2009 Q1, down 45.3% from the Cdn$588.8 million profit the industry reported in 2008 Q1.
The MSA figures exclude data from ICBC, MPI, SAF, Lloyd’s and some Quebec-regulated insurers.
On the positive side, the industry wrote 3.6% more net premium in 2009 Q1 than it did in 2008 Q1. And the industry’s underwriting loss for 2009 Q1, at Cdn$179.2 million, was less than the Cdn$341-million hit it took in the same quarter of 2008.
“Industry underwriting results as at the first quarter of 2009 show some improvement over the first quarter of last year, but the difference is negligible once the effort of reserve discounting is stripped out,” MSA president Joel Baker writes in the report. “The undiscounted industry combined ratio [in 2009 Q1] came in at 100.7[%] versus 100.01[%] in [2008 Q1].
“We must recall that [2008 Q1] was marked by heavy losses resulting from severe winter storms in P.E.I., New Brunswick, Ontario and Quebec. Weather was less severe in Q1 of this year but results took a beating nonetheless.”
Non-underwriting income (investment and other income) was down by Cdn$487 million or by almost 42% over the same period last year.
MCT/BAAT capital scores continued their “gradual downward drift of about 10 points every year since the first quarter of 2007,” Baker observed.