Marketplace

CANADIAN MARKET

Canadian companies record total profit of $4.53 billion in 2011: MSA Research

Canadian property and casualty (P&C) companies reported a profit of $4.53 billion in 2011, according to figures released by MSA Research Inc.

MSA Research’s aggregate industry totals are derived from the individual results of 220 Canadian property and casualty insurers.

Overall, the industry wrote $48.5 billion in premiums in 2011 (up 7% from 2010), according to MSA. It paid out $32.04 billion in net incurred claims (up 6% from 2010).

On the whole, the industry recorded an underwriting profit of $368.7 million in 2011. Its 2011 loss ratio of 71% remained the same as it was in 2010, and its combined ratio decreased to 99% in 2011 from 100% in 2010.

Net investment income for the industry dropped 5% in 2011, down to $4.5 billion.

OSFI-regulated insurers report increased profits, flat investment income

Federally regulated Canadian property and casualty insurers saw their profits increase by just over $1 billion in 2011 despite static net investment income and claims ratios in property lines that are up across the board.

Canada’s federal solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), posted the property and casualty (P&C) insurance industry’s 2011 Q4 results on Mar. 20.

P&C insurers reporting to OSFI made a collective profit of $3.55 billion as of the end of 2011 Q4. That’s up from a $2.44-billion result posted in 2010.

The result seems to be driven by an increased premium volume between 2010 and 2011. Canadian P&C insurers reported net premiums written of $35.7 billion in 2011 Q4, up from $34.5 billion in 2010 Q4.

Net investment income remained virtually static between 2010 and 2011. Canadian and foreign federally regulated insurers reported net investment income of $3.58 billion in 2010 Q4 and $3.55 billion in 2011 Q4.

REGULATION

Ontarians don’t know where to report auto insurance fraud: IBC survey

Ontario residents understand the frequency of insurance fraud, but don’t necessarily know how to blow the whistle on perpetrators, a consumer poll by the Insurance Bureau of Canada (IBC) shows.

Conducted by Pollara, the survey found 83% of Ontarians believe fraud occurs frequently or occasionally in the province. The vast majority (96%) make the connection between fraud and higher premiums for drivers.

However, the survey also found most people (58%) did not know where to report fraudulent activity in a health clinic. Seventy-two per cent said they would likely report a person in the health industry who commits insurance fraud.

Consumers indicated they would report fraud most commonly to police (68%), an insurance company/broker/agent (67%), Ontario’s insurance regulator (51%) and the province’s regulator of health practitioners (47%).

B.C. smoke alarm campaign proposes linking insurance renewals to fire alarm tests

B.C. has launched a smoke alarm campaign that includes a proposal linking annual insurance renewals to fire alarm tests.

Initiated by Shirley Bond, B.C. attorney general and minister of justice, and Len Garis, president of the Fire Chiefs’ Association of B.C., the new campaign represents a sustained, coordinated approach to make sure B.C. homes have a functioning smoke alarm. Research done by Surrey Fire Services, in partnership with the University of the Fraser Valley, shows that almost 70% of houses that caught fire did not have a functioning smoke alarm.

One component of the campaign involves “exploring the potential to utilize the [B.C.] Insurance Act to compel annual testing of smoke alarms upon policy renewal,” according to a statement posted on the B.C. attorney general’s website.

Further details about the campaign will be publicized as it rolls out during 2012. Information about the campaign will be available at: www.fcabc.ca.

CLAIMS

Water losses in New Brunswick quadruple over four years

Insurance Bureau of Canada (IBC) took its message of climate change adaptation to New Brunswick, where data insured water damage losses have almost quadrupled in four years.

Speaking to the Saint John Board of Trade on Feb. 22, IBC president and CEO Don Forgeron observed that water damage losses in New Brunswick escalated from $7 million in 2005 to $23 million in 2009.

“That’s huge,” he said. “And when we compare this relative growth to losses from fire, water wins the race, hands down.”

IBC commissioned a study by Dr. Gordon McBean, a professor at the University of Western Ontario, who found that Atlantic Canada was hit by 16 hurricanes between 1990 and 2005. Most recently, Hurricane Irene caused more than $130 million worth of wind and water damage in August 2011.

“Here in Canada…home, car and business insurers have seen claims pay-outs from severe weather double every five to 10 years since the 1980s,” Forgeron said.

Canadians have misplaced confidence in their water infrastructure: RBC poll

Canadians have a misplaced confidence in the quality of their water infrastructure, according to the fifth annual RBC Canadian Water Attitudes Study.

In a sample of more than 2,428 adult Canadians, about 80% of respondents reported feeling no need for major and immediate investment in their community’s drinking water/wastewater facilities. These survey respondents believed their water infrastructure to be in good condition and in need of only minor investment for upkeep.

And yet, more than a third (37%) of Canadians who use municipal water said they were not very aware of the condition of the water and sewage infrastructure serving their own home.

“Canadians believe in the safety of their drinking water and assume that the infrastructure that provides it is efficient,” says Bob Sandford, chairman of the Canadian Partnership Initiative

of the UN Water for Life Decade. “This is a national ‘pipe dream’ because in many municipalities, water distribution and sewage pipes can be up to 80 years old and have already reached the end of their service life. In fact, reports have shown there is an $88-billion investment required to repair and build new water infrastructure in communities across Canada.”