Canadian P&C growth in direct premiums written expected to drop to less than 3% in 2008

Swiss Re expects growth in direct premiums written (DPW) in Canada’s overall property and casualty industry will be less than 3% in 2008, down from 2007’s growth of 4.3%
“Direct premiums written growth slowed to 1.8% [year-over-year] in [2008 Q1] from 3.7% [year-over-year] in [2007 Q1],” Swiss Re noted in its 2008 Q2 newsletter, Canada Property & Casualty Quarterly.
Swiss Re noted personal property premiums in Canada grew 6.9% year-over-year in 2008 Q1, after growing 8% in 2007. “But Canada’s housing boom is cooling and premium rates remain soft, so the growth in personal property premiums is likely to slow later in the year,” Swiss Re says.
The reinsurer notes competitive pressures remain strong across the board, but especially for commercial lines, where premium growth was flat and liability lines DPW fell 6% year-over-year in 2008 Q1.
A Q1 underwriting loss in 2008 followed poor auto results in Ontario and Alberta and severe winter weather in central and eastern Canada. Expressed in terms of deteriorating loss ratios, the sharpest decline in loss ratios occurred in the auto lines. Specifically, in the personal accident category, the loss ratio went from 89% in 2007 Q1 to 109% in 2008 Q1.
Overall, Swiss Re predicted the Canadian P&C industry’s combined ratio would increase from 92.4% in 2007 to 96% in 2008.