Canadian (re)insurance market holds much more stability than U.S. neighbours

The Canadian reinsurance and insurance markets are far more stable than their U.S. counterparts, said Hans Rohlf, managing director North America and chief underwriting officer at Hannover Re.
Rohlf was speaking during a presentation, Hannover Re Views of the Canadian Market, in Niagara-on-the-Lake on June 16.
Between 1996 and 2006 the average combined ratios for the Canadian insurance market and reinsurance market were 100.1% and 101.5%, respectively.
“One probably could say that it’s easy to say here that there is a fair picture. Not true for the U.S.,” Rohlf said.
In the U.S., during the same time frame the industry average combined ratios for insurance and reinsurance were 104.9% and 112.6%, respectively.
“If you’re just [in the U.S.] to write over a certain time span, say 15 or 20 years, then you are dead in the water,” Rohlf said.
“The only way you can [survive in the U.S. market] is to write a cycle, de-emphasise during the soft market and hopefully have lots of lines in the harder market. You have to strive to identify those clients who are a little bit better than others,” he said.
“I think it’s relatively clear if you look at these figures that the stability in the [Canadian] market is certainly more attractive from an insurance and reinsurance point-of-view.”
Rohlf also noted, however, that cession rates in Canada tend to be lower than the world-wide average.
In Canada only 6.5% of the insurance market is ceded to reinsurers, whereas in the U.S. this figure is 7.5% and worldwide 11%.