Canadian Underwriter

Insurance revenue up 7.7% at TD Bank

February 25, 2016   by Canadian Underwriter

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The Toronto-Dominion Bank reported Thursday its insurance revenues were $968 million during the three months ending Jan. 31, up 7.7% from $899 million during the same period a year earlier.

TD writes home, auto, credit protection, travel and life and health insurance

TD writes home, auto, credit protection, travel and life and health. For the latest quarter, the bank did not report specifically on the performance of its property & casualty operations.

In Canadian retail, TD’s non-interest income was $2.54 billion in the most recent quarter, up from $2.262 billion in 2015.

Insurance claims and related expenses were $655 million in the latest quarter, down 6% from $699 million during the three months ending Jan. 31, 2015.

This reflected “the change in the fair value of investments supporting claims liabilities, less severe weather conditions, and favourable prior years’ claims development, partially offset by increases related to a change in mix of reinsurance contracts,” TD said in a press release Feb. 25.

TD’s fiscal year runs from Nov. 1 through Oct. 31. Revenue during the latest quarter was $8.61 billion while net income was $2.223 billion.

TD writes home and auto insurance through Meloche Monnex Inc., which owns Security National Insurance Company.

TD reported last year that in the year ending Oct. 31, 2015, 68.9% of net written premiums in p&C were derived from automobile policies and 30.6% were from residential policies.

TD Insurance ranked third among Canadian insurance writers – behind Intact and Aviva – when measured by net premiums written in 2014, according to the Canadian Underwriter Statistical issue. Those rankings exclude purely life and A&S writers. Desjardins and State Farm were counted separately in 2014, before Desjardins closed its acquisition of the Canadian operations of State Farm.

Last month, the Royal Bank of Canada announced that Aviva Canada Inc. agreed to buy RBC General Insurance. That agreement – valued at $582 million – is subject regulatory approval. RBC ranked 15th in 2014 among Canadian p&c insurers in Canadian Underwriter’s statistical issue.

RBC, which released its Q1 2016 financials Wednesday, reported net earned premiums of $876 million during the three months ending Jan. 31, 2016.

No other Big 5 Canadian bank writes home and auto insurance.

The Canadian Imperial Bank of Commerce and the Bank of Nova Scotia sell home and auto written by subsidiaries of Desjardins Group. The Bank of Montreal does not sell either home or auto insurance.

Canada’s Bank Act stipulates that Canadian banks are “authorized” to sell eight types of insurance: credit or charge card-related; creditors’ disability; creditors’ life; creditors’ loss of employment; creditors’ vehicle inventory; export credit; mortgage; and travel. Banks may sell other types of insurance (such as home and auto) through subsidiaries but not from their bank branches. Banks are also not allowed to provide access, from their web pages, to other web pages through which “other” types of insurance are sold.