Canada likely to see pricing pressure by end of year

The only product in the Canadian (re)insurance market experiencing cutbacks is credit insurance, said Jack Lee, national marketing manager at BFL Canada, in BFL’s publication The Cover Note.
In a question-and-answer section on the state of the (re)insurance market, Lee also commented that: “One would also expect directors’ and officers’ coverage to show caution, but insurers are actually becoming aggressive due to the number of markets wanting to grow their portfolios.”
Lee also told The Cover Note that Canada’s commercial markets are generally seeking modest rate increases in property, with casualty remaining flat.
Premium adjustment credits are a factor as insureds report decreased revenues from 2008, adding to overall premium reductions, he added.
“Considering all the factors, certain insurance buyers should see overall increases in 2009; however this is not the case if the client has been profitable or is in a target area where insurers want to grow,” Lee told the publication.
“Our market remains very diverse and there is plenty of capacity and competition. Underwriters want and need premium increases. Choice accounts, however, are still desirable and competition remains fervent.”
Lee also said he expects to see considerable pressure in pricing by 2009 Q3 if the first six months of the year do not see improvement.