Canada’s federally regulated insurers see 2008 nine-month profits sink by Cdn$700 million

Canadian federally regulated insurers during the first nine months of 2008 saw their collective net income drop about Cdn$700 million compared to the same period last year.
Insurers reporting to the Office of the Superintendent of Financial Institutions (OSFI) posted a Cdn$1.5-billion net income during the first three months of 2008, down from the Cdn$2.3 billion it reported during the same period last year.
OSFI figures show that insurers reporting to it saw a $400-million drop in net investment income during the first nine months of 2008. Their investment income fell from Cdn$2.1 billion during the first nine months of 2007 to Cdn$1.7 billion over the same period this year.
OSFI’s premiums and claims figures show a 14% increase in insurers’ claims ratios related to automobile personal accident lines during the first nine months of 2008. The claims ratio on the personal accident line went from 84.4% during the first nine months of 2007 to 98.8% during the same period in 2008.
Auto liability claims ratios, in contrast, increased about 4% over the same period.
Overall, claims ratios in both personal and commercial property lines have increased by about 7% each during the first nine months of 2008.