Canadian commercial insurance rates are expected to remain stable across most lines of business in 2012, continuing a trend that began in the second half of 2011, according to a report by Marsh.
In its report Navigating the Risk and Insurance Landscape: Canada Insurance Market Report 2012, Marsh noted that substantial catastrophe losses and reduced investment returns prompted many insurers to seek rate increases in 2011.
Property insurance rate reductions will likely cease in 2012, especially for Canadian insureds with significant loss histories or U.S. catastrophe exposures. Companies with U.S. catastrophe exposure will likely see rate increases of up to 15%.
Rates for financial and professional lines, including for directors and officers liability, are expected to remain stable in 2012, although some rate decreases are still achievable.
"Entering 2012, the Canadian insurance market remains in a state of transition," said Marsh Canada Limited president and CEO Alan Garner. "Insurers are expected to be extremely disciplined in their underwriting and seek rate increases where they can.
"Insureds that are able to provide insurers with complete, accurate and quality data will be best positioned to secure more competitive rates at renewal."
Although many insurers continue to view Canada as a good place to do business (which has fuelled competition in the marketplace), the report found that mergers and reorganizations in the insurance industry could negatively impact available capacity in 2012.