Canadian Underwriter

P&C industry’s hottest growth line of the decade

April 26, 2022   by David Gambrill

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Canada’s commercial property line has been the P&C industry’s hottest growth area of business over the past decade, according to the Q4-2021 MSA Outlook Quarterly.

This might come as a surprise to some, given personal auto insurance accounts for just over 30% of all the country’s direct premiums written (DPW), per 2021 statistics from Canada’s financial solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI).

Auto insurance used to be seen as P&C’s bread-and-butter, but DPW growth patterns show a change over the past decade.

Commercial property has more than doubled in premium volume since 2011, as noted by MSA president and CEO Joel Baker in the Q4 2021 MSA Quarterly Outlook Report. Most of that growth happened after 2016.

Commercial property premium volume written by federally regulated insurers started at roughly the $5.7 billion mark in 2011, soaring to $12.3 billion in 2021 – about 115% growth over the past decade.

By contrast, personal lines auto premium volume grew only 43% over the past decade, Baker notes in his article. OSFI figures — which, unlike MSA’s stats, do not include provincially licensed insurers — show personal auto premiums rose from $13.97 billion in 2011 to $19.57 billion in 2021.

“Which lines rose the most and at the greatest velocity in the past 10 years?” MSA president and CEO Joel Baker asks in his article, ‘Industry Pulse – Line by Line.’ “Well, we ran the numbers on the industry (excluding government). As you can see…commercial property took the cake as the line that grew the most, more than doubling in volume since 2011, with most of the growth starting in 2016.

“The runners up are the liability/casualty lines which also doubled again with most of the growth starting at the same time, 2016.”

Liability premiums grew by more than 100% over the past decade, according to MSA stats. OSFI figures show premium volume in the liability line rising from $4.7 billion in 2011 to $9.9 billion in 2021.

In fact, commercial auto (more than 80% premium growth in 10 years, per MSA), and boiler and machinery (more than 70% premium growth) each finished ahead of personal auto in terms of growth. And personal property premium clocked in at more than 90% premium growth since 2011.

Why has personal auto fallen from grace?

“The COVID rebates and rollbacks played a big role in this, as did the slowdown in private passenger growth itself, a trend that predates COVID,” Baker observes. “As we mentioned before, auto is in long-term secular decline as a mainstay of the industry. Compare this to personal property which almost doubled in the same period amid a rising risk backdrop.”

Baker cautions these results are “done at the 100-foot level.” Results vary according to many factors including individual company portfolios, regional breakdowns, group-by-group trends and by various commercial insurance sub-lines.


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