Canadian Market (October 01, 2009)

ROLE FOR CANADIAN P&C INSURANCE

INDUSTRY IN ESTABLISHING, ENFORCING BUILDING CODES: ICLR

An eyewitness inspection of damage done to homes following several tornadoes that hit Ontario on Aug. 20, 2009 has started a discussion about whether or not the Canadian property and casualty insurance has a role to play in raising awareness about Canadian building codes and the municipal enforcement of these codes.

Paul Kovacs, executive director of ICLR, said the organization was talking about taking two possible directions.

The first involved sharing research about tornado damage to help improve municipal building codes.

“Our industry has been relatively not involved in talking about codes for some time now,” he said. “How could we get more involved in sharing research from our industry’s perspective with those who make decisions about the building code?”

Secondly, Kovacs observed, Canada may consider following the lead of its counterparts in the U.S. property and casualty industry.

In the United States, he said, the property and casualty industry was starting to rate communities on how well their building codes were enforced.

CANADIAN P&C PROFITS DECLINE IN 2009 Q2

Federally regulated Canadian property and casualty insurers reported a decline in 2009 Q2 profits — sliding from a net income of

Cdn$1.42 billion in 2008 Q2 to a profit of Cdn$1.07 billion during the same period this year.

Recent figures posted by Canada’s federal solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), show Canadian P&C insurers’ net investment income declined from Cdn$1.72 billion in 2008 Q2 to Cdn$1.322 billion in 2009 Q2.

Underwriting income similarly took a hit in 2009 Q2. Last year, in 2008 Q2, both Canadian and foreign-based property and casualty insurers reported a total underwriting profit of

Cdn$137.96 million. That dipped down to Cdn$125.8 million in the second quarter of this year.

The one relative constant, OSFI figures show, is net premiums written, which were roughly the same this year as they were last year. Overall, the industry reported writing Cdn$15.98 billion in net premium in 2009 Q2, slightly more than the Cdn$15.6 billion it wrote during the same period last year.