Private passenger personal accident insurers have experienced a loss ratio of nearly 70% so far in 2021, while the loss ratio for cyber liability is more than 100%.
The federal Office of the Superintendent of Financial Institutions has posted the Q2 financial data for P&C insurers that it regulates. This data tallies the year-to-date statistics, meaning the first six months of 2021.
The overall net income (after tax and including both investment and underwriting income) was $4.23 billion on nearly $32 billion in net premiums earned. These figures come from adding the totals for Canadian and foreign P&C insurers but not adding in the figures for mortgage insurers.
Some individual lines were more profitable than others, OSFI results show. In cyber liability, total net premiums earned for the second half of 2021 were $94.15 million – $12.15 million from Canadian insurers and $82 million from foreign insurers. But total net claims incurred (not including reinsurers’ share but including adjustment expenses) were $106.26 million ($97.4 million from foreign insurers and $8.86 million from Canadian insurers), for a loss ratio of nearly 113%.
Some cyber liability policies cover the cost of notifying victims of a data breach.
In auto insurance, the loss ratio was nearly 56%, with industry-wide net claims and adjustment expenses of $5.997 billion. Of that, $5.831 billion was reported by Canadian insurers while the other $166 million was reported by foreign insurers. Total auto net earned premiums were $10.75 billion, of which $10.41 billion went to Canadian insurers while $340 million went to foreign insurers.
In non-private-passenger auto, P&C insurers incurred claims and adjustment expenses of $998 million on net premiums earned of $2 billion, for a claims ratio of less than 50%.
But when you drill down into various auto lines, the profitability varies.
While the overall claims ratio in private passenger auto was about 57%, carriers didn’t do so well in private passenger auto personal accident. In that line, claims and adjustment expenses incurred were $1.079 billion while net premiums earned were $1.557, for a claims ratio of 68.8%. Essentially all of that was in the Canadian P&C bucket.
Meanwhile the claims ratio in private passenger liability was less than 53%, with net claims incurred of $2.42 billion on net premiums earned of $4.118 billion.
In the private passenger “other” category, the industry had net claims of $1.615 billion on net premiums earned of $2.887 billion, for a claims ratio of 56%.
Total investment income, year-to-date, was $1.396 billion, of which $1.23 billion was earned by Canadian carriers and $166 was reported by foreign carriers.
Some of the carriers that OSFI places in the “Canadian P&C” category are, nonetheless, Canadian branches of companies based outside of Canada. Some examples are AIG Insurance Company of Canada, Aviva General and Travelers Insurance Company of Canada, just to name a few. Examples of carriers in the foreign P&C bucket include but are not limited to XL Specialty, Lloyd’s Underwriters and Liberty Mutual.