May 28, 2003 by Canadian Underwriter
The Canadian p&c insurance industry did not fare well on its “industry report card” from rating agency Standard & Poor’s (S&P).
S&P said the outlook for the industry remains negative despite price hikes over the past year.
“Intense competition, unrelenting claims costs, and poor investment returns continue to be factors that erode away profitability and capital,” a press release on the report states.
Despite some consolidation, there are about 230 insurers in the market, no one dominant player and therefore no price leadership, S&P comments.
The report also points to the troubled auto insurance market, the largest market in the country. “The upward spiral in automobile claims has not only led to a decline in profitability, but also to multi-million-dollar reserve-strengthening adjustments,” says Donald Chu, S&P credit analyst.
The full report can be seen at www.ratingsdirect.com.