Canada’s P&C industry profits continue to slide in 2009 Q1: OSFI figures

OSFI-regulated insurers in 2009 Q1 continued to see their profits spiral downward.
Canadian and foreign property and casualty insurers saw their 2009 Q1 profits sink to a total of Cdn$399.6 million, down from Cdn$628.3 million over the same period last year.
In addition, Canadian property and casualty companies saw their overall minimum capital test (MCT) score decline from 236.7% in 2008 Q1 to 223.7% in 2009 Q1.
Foreign P&C insurers, on the other hand, saw their branch adequacy of assets test (BAAT) scores increase from 328.6% in 2008 Q1 to 353.4% in 2009 Q1.
Auto insurance claims continue to plague the industry as of 2009 Q1. Loss ratios in OSFI’s category of personal auto accident claims (which includes accident benefits) continue to hover above 100%, representing insurer losses.
For Canadian P&C insurers, the overall claims ratio in the personal accident category was 106.7%, which actually represents a marginal improvement over the 108.9% reported during the same time last year.
But foreign insurers reported a huge claims ratio in the personal accident category, which jumped to 155.2% in 2009 Q1. (It was 107.7% in 2008 Q1.)
Claims ratios in the property side, both personal and commercial, are also on the upswing, according to OSFI’s stats for the first quarter in 2009.
Canadian insurers reported a 79.1% claims ratio in personal property lines in 2009 Q1 (it was 70.4% during the same time last year), while foreign insurers saw their personal property claims ratio go from 67.7% in 2008 Q1 to 72.4% in 2009 Q1.
In commercial lines, Canadian P&C companies reported a claims ratio of 73.5% in 2009 Q1. Foreign P&C companies saw their claims ratio jump almost 11% since 2008 Q1, showing a ratio in 2009 Q1 of 82.2%.