Canada’s federally regulated P&C insurers double their profits in 2010 Q1

Canada’s federally regulated property and casualty (P&C) insurers slightly more than doubled their profits in 2010 Q1 compared to the same period of 2009.
Canadian P&C insurers fared better than their foreign counterparts.
One notable feature of the 2010 Q1 results is significantly declining personal property claims ratios.
Overall, Canadian and foreign P&C insurers totalled $835.8 million in profits in 2010 Q1, up significantly from their net income of $399.6 million in 2009 Q1.
But figures reported to the Office of the Superintendent of Financial Institutions (OSFI) show Canadian P&C insurers’ financial results are headed in a different direction than those of their foreign counterparts.
Canadian P&C insurers reported a profit of $729.6 million in 2010 Q1, a marked improvement over the $136.7-million profit they made during the trough of the market recession in 2009 Q1.
Foreign P&C insurers, on the other hand, made even less money ($106.2 million) in 2010 Q1 than they did at the height of the global recession in 2009 Q1 ($262.9 million).
One explanatory factor may be that Canada’s foreign P&C insurers are now officially losing twice as much as they are making in the automobile personal accident lines. Foreign insurers reported a claims ratio (claims costs divided by premium earned) of 216.5% in 2010 Q1, a 60-point bulge over the same period last year.
Canadian P&C insurers, in contrast, reported a claims ratio of 119.79% in the automobile personal accident category in 2010 Q1.
Claims ratios in personal property lines were surprisingly low in 2010 Q1.
Canadian P&C insurers reported a claims ratio of 53.4% in personal property, while their foreign counterparts reported a claims ratio of 63.45%.
This is a significant downturn from high claims ratios reported in the personal property category in 2009 Q1. At that time, Canadian P&C insurers had a personal property claims ratio of 79.14%, whereas foreign insurers in the same lines reported a claims ratio of 72.4%.
Commercial claims ratios also improved in 2010 Q1.
Canadian P&C insurers had a claims ratio of 64.03% in commercial property lines in 2010 Q1 (down from 73.49% during the same period last year), and foreign P&C commercial insurers recorded a claims ratio in commercial lines of 66.57% (down from 82.76% in 2009 Q1).