Canadian P&C industry’s key financial performance indicators all down in 2011 Q1

Canada’s property and casualty insurance industry saw a 13.7% decrease in profits, a slower premium growth, an elevated combined ratio and a decreased investment yield in 2011 Q1, according to Swiss Re.
In its Canadian Property & Casualty Quarterly for June 2011, Swiss Re reported the Canadian P&C industry’s after-tax profits declined by $115 million in 2011 Q1, down to $721 million. The industry’s capital increased by 0.4% over the same period.
The industry posted an underwriting profit of $165 million in 2011 Q1, but this was down from a gain of $282 million a year ago.
Direct premiums grew by 2.9% in 2011 Q1, compared to 4.6% over the same period last year. Specifically, property premiums were up 3.1% (to $2.4 billion), driven mainly by 6.5 % growth in personal property. Commercial property premiums decreased marginally, by 0.4%. Auto premiums grew by 2.7% year-over-year, driven by a 5% growth in the motor liability segment.
The industry’s combined ratio deteriorated by 1.5 points, moving up from 96.9% in 2010 Q1 to 98.4% in 2011 Q1. Swiss Re says this was the result of large cat losses in the first quarter of 2011.
Finally, the Canadian P&C industry’s yield on invested assets (including realized capital gains) declined to 3.6% in 2011 Q1 compared to 4% in 2010 Q1. Invested assets (including cash) grew by 5.5% to $89.3 billion.