Canadian P&C insurers continue to suffer from recessionary conditions: Swiss Re

Canadian property and casualty insurers continued to suffer from recessionary conditions in 2009 Q1, with underwriting profitability continuing to deteriorate, Swiss Re observed in its July 2009 edition of Canadian Property & Casualty Quarterly.
Overall, the Canadian property and casualty industry recorded underwriting losses of Cdn$84.3 million in 2009 Q1, “an improvement from Cdn$319 million [in losses] a year ago,” Swiss Re reported in its newsletter.
“However, [2008 Q1], was a quarter with substantial reserve additions.”
The industry’s 2009 Q1 combined ratio was 101.3%, an improvement over its 104.4% ratio in 2008 Q1. But the 2009 Q1 ratio was up considerably from the combined ratios recorded in the second (94.3%) and third (98.3%) quarters of 2008.
“Premium growth was weak in most lines of business,” Swiss Re reported.
Swiss Re said the Canadian industry’s direct premiums written increased marginally to 2% in 2009 Q1, roughly half of the 4.3% premium growth recorded in 2007.
Overall the industry’s loss ratio for 2009 is anticipated to be 73%, an increase over 70.2% in 2008 and 62.9% in 2007.
The property loss direct ratio in 2009 Q1 increased by more than eight points up to 83.9%. The motor segment had a direct loss ratio of 89.9%.
“The personal accident [2009 Q1] direct loss ratio increased six points to 125%, which is largely driven by Ontario auto,” Swiss Re said.