Canadian Market (October 01, 2010)

ALBERTA-INCORPORATED INSURERS ALMOST DOUBLE CONSOLIDATED NET INCOME

Alberta-incorporated property and casualty insurers nearly doubled their consolidated net income from $18.3 million in 2009 H1 to $31.9 million in 2010 H1. The figures reflect results reported by: Alberta Motor Insurance Company; Canadian Farm Insurance Company; Fortress Insurance Company; Mennonite Mutual Insurance Company; Millennium Insurance Company; Peace Hills Insurance Company; and Trans Globe Insurance Company.

Peace Hills Insurance Company showed the greatest year-over-year turnaround. The insurer reported a net loss of $503,000 in 2009 H1. That figure surged to a profit of $6.9 million in 2010 H1.

Underwriting income also improved for this group of insurers. In 2009 H1, the group reported a consolidated underwriting income of $9.35 million. That figure grew to $14.5 million in 2010 H1.

CANADIAN P&C INSURERS DOUBLE THEIR 2010 Q2 INCOME

Canadian federally regulated property and casualty (P&C) insurers more than doubled their Q2 net income in 2010 compared to the same period of 2009.

However, the same cannot be said for their foreign counterparts, according to the Office of the Superintendent of Financial Institutions (OSFI).

Canadian property and casualty insurers reported profits of $1.4 billion to OSFI in 2010 Q2, up significantly from 2009 Q2’s net income of $642 million.

Foreign property and casualty insurers saw their net income decline from $430 million in 2009 Q2 to $117 million in 2010 Q2.

Although Canadian property and casualty reported strong gains in underwriting income quarter-over-quarter ($49 million in 2009 Q2 to $486 million in 2010 Q2), foreign insurers saw their underwriting profits turn to losses ($76 million profit in 2009 Q2 and a loss of $250 million in 2010 Q2).

HUB ACQUIRES SINCLAIR COCKBURN FINANCIAL GROUP

Hub International Limited (Hub) has acquired the shares of Sinclair Cockburn Financial Group (SCFG), a Toronto, Ontario-based insurance and financial services firm with approximately $11 million in annual revenues.

Under the terms of the ac- quisition, Hub has acquired the property and casualty, personal insurance and group/life insurance operations of SCFG, but not SCFG’s mortgage and mutual fund business.

Jim Aston, Kelly Sinclair and Jim Grieve, SCFG’s three majority shareholders, will all join Hub as part of this transaction.

Grieve, president of Sinclair Cockburn Financial Group, will become part of Hub Ontario’s leadership team, reporting to Neil Morrison, president and CEO of HKMB Hub International Limited.

CANADIANS’ APPROVAL OF HOME INSURERS SLIPS

Canadian consumers aren’t as pleased with their home insurers as last year, citing a combination of premium increases and less frequent communication with their insurers, reports J.D. Power and Associates.

Overall satisfaction with home insurance providers in 2010 averaged 735 on a 1,000-point scale, down two points from 2009, reports J.D. Power.

“The decrease is primarily driven by a decline in satisfaction with the policy offerings factor, down 17 points from 2009,” a release says.

In its 2010 Canadian Home Insurance Customer Satisfaction Study, J.D. Power measures home insurance policyholder satisfaction with five factors:

• interaction

• price/premium

• policy offerings

• billing/payment

• claims

In the interaction category, consumers indicated they were hearing less from their insurers than they would like.

For example, in 2010, 57% of policyholders indicated they were notified in advance of premium changes, compared with 63% in 2009.

Only 28% of policyholders indicated their insurance provider discussed coverage and discount options with them in 2010, compared with 43% in 2009.