Canadian Underwriter

Some Assembly Required

February 27, 2018   by David Gambrill, Editor-in-Chief

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Auto lines across Canada are in dire need of repair right now.

In a fairly benign year, with virtually no major catastrophe events, the Canadian property and casualty industry still came dangerously close to losing money, posting a relatively disappointing overall combined ratio of 96.8 per cent. How could that happen?

Blame the car.

The financial results in auto lines last year basically squandered an opportunity for the industry to put money in the bank for a rainy day in 2018.

David Gambrill, Editor-in-Chief

Reasons for the poor auto results vary. They include distracted driving, increased liability awards, higher repair costs, damage/injuries caused by uninsured drivers, auto insurance fraud, generous no-fault compensation, inflexible regulatory regimes for setting rates, etc. etc.

How bad is the situation?

Auto insurers generally get nervous when their loss ratios start to approach 60 per cent. Contrast this with the following loss ratios posted in auto lines last year, based on MSA Research statistics:  New Brunswick 90%, Nova Scotia 86.9%, Newfoundland 84.3%, Alberta 82.7%, and Ontario 72.7%.

A blip on the radar? A bad year? Insurance professionals only wish. The auto personal accident line has been deteriorating since 2012, A.M. Best reports.

So what do insurers do about it? Historically, the industry has lobbied governments to fix it.

Read the full article in the Digital Edition of the February 2018 Canadian Underwriter.

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