Canadian Underwriter

Homeowners loss ratio drops to 49.1% for this Top 10 insurer

November 3, 2021   by Greg Meckbach

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Canada’s sixth-largest property and casualty insurer has a loss ratio in home insurance of under 50% so far this year, but large losses in Western Canada had an adverse impact on the quarter ending Sept. 30.

The Co-operators General Insurance Company reported Oct. 28 a 9.7-point increase in its loss ratio, from 53% in Q3 2020 to 62.7% in the three months ending Sept. 30, 2021. But for the first nine months, the loss ratio improved 4.2 points, from 53% in 2020 to 49.1% in 2021.

Industry-wide, Canada’s P&C insurers had a loss ratio of about 47% during the first six months of 2021, according to data from the federal Office of the Superintendent of Financial Institutions.

For Guelph, Ont.-based The Co-operators, the 9.7-point increase in its Q3 homeowners’ loss ratio is “due to higher major event claims, particularly in the West, and was partially offset by lower unfavourable claims development, coupled with an increase in average premium across all regions,” Co-operators General said in its management discussion and analysis released Oct. 28.

A July 2 Calgary storm (that included hail, wind and rain) is estimated to have cost the industry $247 million in insured damage, the Insurance Bureau of Canada reported this past August, quoting Catastrophe Indices and Quantification Inc. (CatIQ). At that time, Calgary experienced extensive flooding of streets, underpasses and parking lots as well as a damaged gas line, downed trees and sewer backup in basements and commercial buildings.

Other Q3 2021 property catastrophes in Western Canada, reported by IBC and CatIQ, include:

  • severe storms in Saskatchewan and Alberta beginning Aug. 31 that caused flash flooding and large hail, with an estimated industry-wide loss of $64 million;
  • a July 22 storm – with strong wind gusts, hail and rain – with an estimated industry-wide loss of $56 million in Alberta and Saskatchewan;
  • The White Rock Lake, British Columbia wildfire, with an estimated industry-wide loss of $77 million; and
  • The Lytton, B.C. wildfire, with an estimated industry-wide loss of $78 million.

For its part, Co-operators General reported Oct 28 its combined ratio, excluding market yield adjustment, was 93.7% in the latest quarter, up from 91.6% in Q3 2020 but down from 103% in Q3 2019.

Including market yield adjustment, The Co-operators had a combined ratio of 93.5% in the latest quarter.

Net income was $86.8 million in Q3 2021, down from $152.3 million in the same period of 2020.

The Co-operators reported direct premiums written of $1.09 billion in Q3 2021, up 3% from $1.076 billion in Q3 2020.

The Co-operators ranked sixth in the Canadian P&C industry when measured by net premiums written in 2020, behind Intact, Desjardins, Lloyd’s, Aviva and Wawanesa. That ranking is from The Canadian Underwriter 2021 Statistical Guide, powered by MSA Research.


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