Claims, declines in investment income led to unprofitable six months for insurers: MSA Research

It was a rocky start to 2018 for insurers in Canada, according to the latest Quarterly Outlook Report from MSA Research.

Although premiums written grew by 7.6% compared to the same time last year, they were offset by a 12% increase in claims. A decline in investment income also contributed to an industry-wide underwriting loss and a “steep decline” in net income for insurers, writes Joel Baker, president and CEO of MSA Research.

Personal and multi-line writers managed to shave 1.2 points off their expense ratios, but saw their combined ratio deteriorate nearly 2 points to 102.7. Their net income dropped 74% compared to H1 2017 and their total comprehensive income was “wiped out” from $670 million to “essentially zero” in H1 2018.

Commercial writers saw their collective combined ratio deteriorate by 10.5 points to 106.5, and their investment income decreased by 50%, leading to an 80% decline in net income and a total comprehensive loss of $2 million.

On the reinsurance front, the combined ratio deteriorated slightly to 94%, compared to 93.5% at the same time last year. Net premiums written increased by 36%, net premiums earned increased by 21% and claims increased by 27%.

CatIQ declared that there were six cats and five notable events in the first half of 2018, leading to $1.2 billion in insured losses. So far in the third quarter, there have been four cats and three more notable events.

Read MSA Research’s Quarterly Outlook Report.

Canadian Insurance Top Broker is now on Facebook (facebook.com/TopBrokerMag) as well as LinkedIn (linkedin.com/company/citopbroker) and Twitter (twitter.com/CITopBroker). Follow us for easy access to the top P&C news you need to know.

This story was originally published by Canadian Insurance Top Broker.