Canadian federally regulated P&C insurers boost results in 2012 Q1

Federally regulated property and casualty insurers in Canada posted improved financial results in 2012 Q1, recording a collective quarterly profit of $1.048 billion this quarter as opposed to a $721.7-million profit in the same period last year.

Figures from the Office of the Superintendent of Financial Institutions (OSFI) show that insurers wrote net premiums of $8.2 billion in 2012 Q1, up from $7.5 billion for the same quarter in 2011. Despite this increase in premium revenue, insurers saw their quarterly investment income sink from $815.2 million last year to $753.8 million in 2012 Q1.

OSFI’s claims figures indicate that although quarterly claims ratios in the private passenger personal accident category — encompassing accident benefits — have shown a dramatic improvement, auto insurance liability figures are taking a turn for the worse.

In the auto insurance personal accident category, Canadian P&C insurers saw quarterly claims ratios decrease from 78.34% in 2011 Q1 to 56.87% in 2012 Q1. Foreign insurers saw their claims ratios in the same category drop from 123.34% during the first quarter last year down to 84.01% in 2012 Q1.

On the flip side, auto liability claims ratios have reached the unprofitable territory for some. Canadian P&C insurers reported a first quarter claims ratio of 71.68% on the auto liability side last year; this year, the ratio has escalated to 80.69%. Foreign insurers have seen their auto liability claims ratio jump from 91.89% in 2011 Q1 to 116.71% in 2012 Q1.

Insurers seemed to get a handle on claims ratios in personal property lines. Canadian insurers saw their claims ratios decrease from 58.56% in 2011 Q1 to 52.87% in 2011 Q1, while foreign insurers registered with OSFI saw a similar decline in personal property claims ratios — from 60.39% in 2011 Q1 to 54.63% in 2012 Q1.

On the commercial property side, Canadian P&C insurers reporting to OSFI saw an uptick in their quarterly claims ratios — from 63.45% in 2011 Q1 to 66.62% in 2012 Q1. Foreign insurers, on the other hand, saw a substantial drop in their commercial property claims ratios — down from 83.07% in 2011 Q1 to 46.46% in 2012 Q1.