Insurers lift net earnings more than double for 3-Q

Canadian insurers produced an after-tax profit of $1.8 billion for the third quarter of this year, more than double the $890 million that companies reported for the same period in 2003, according to industry financial data collected by the Office of the Superintendent of Financial Institutions (OSFI). Much of the net gain made by the insurance industry for the latest reporting period resulted from better underwriting, with insurers posting an underwriting profit of $1.1 billion compared with the $56.7 million shown at the end of the third quarter of last year.
Notably, insurers were able to maintain a strong annual growth of 17.4% in net written premiums for the third quarter of this year, which clocked in at $16 billion (3-Q 2003: $13.6 billion) suggesting that pricing momentum is being maintained. Net earned premiums for the latest reporting period increased year-on-year by 21% to $15 billion (3-Q 2003: $12.4 billion) while the industry’s net investment income (investment income and realized gains combined) rose by 15.3% to $1.4 billion compared with the $1.2 billion reported at the end of last year’s third quarter. In contrast, insurers’ claims costs for the third quarter of this year grew by 10.2% to $9.6 billion versus the $8.7 billion shown for the comparable period in 2003. The industry’s loss ratio for the latest reporting period shows just over a six percentage point improvement at 63.8% versus the 69.9% ratio reflected at the end of the same period a year ago.