Canadian Underwriter

Strong investment gains even out results for Ontario mutual insurers

April 3, 2017   by Angela Stelmakowich

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Financial results for Ontario mutual insurers in 2016 were better than expected, with 2016 marking the eighth consecutive year of overall profitability and seventh year in a row of underwriting profit.

The aggregate results for Guarantee Fund Mutuals in 2016 show the surplus amounted to $1.17 billion, up 3% from $1.14 billion in 2015, John Taylor, president and CEO of the Ontario Mutual Insurance Association told attendees of OMIA’s Annual General Meeting last Thursday.

2016 results “stayed on the positive side, but as opposed to 2015, this was driven by investments, not underwriting,” Taylor reported.

Investment gains amounted to $53 million in 2016, an impressive 152% increase over the prior-year period when they were $21 million.

“The investment climate was much friendlier than in 2015,” Taylor commented. “In particular, it was a good year to invest your money in Canada and strong investment performance helped to even out the overall results,” he said.

Compare investment gains to underwriting results, which were down 76% in 2016 to $9 million from $38 million in 2015. “While there were some storm events, the bigger story for many of our mutuals was a rash of large loss fires, in both farm and residential risks,” Taylor noted.

John Taylor, President and CEO of Ontario Mutual Insurance Association

John Taylor, President and CEO of Ontario Mutual Insurance Association

With regard to direct premiums written for mutual insurers, they were up 3.6% to $722 million from $697 million in 2015. The net gain was also positive, increasing 6.4% to $50 million in 2016 compared to $47 million in 2015.

Growth in the property and casualty insurance sector is challenging given the competitive Canadian insurance market as a whole, Taylor (pictured left) suggested.

“Our overall growth of 3.6% was better than might have been expected and some of our companies showed very strong growth, well above the mutual average,” he said.

“I think growth will continue to be hard won in 2017, and I tip my hat to you for growing in a tough market,” Taylor told attendees.

“As we carry on into 2017, we remain a strong financial network, protecting policyholders with over $1 billion in surplus that guarantees each policyholders unpaid premiums and outstanding claims,” Taylor emphasized.

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