Personal and commercial lines headed in opposite directions in 2009 Q3: MSA/Baron Outlook

The 2009 Q3 results of the Canadian property and casualty industry represented a tale of two cities, including the “worst of times” for personal and multi-lines insurers and the “best of times” for commercial insurers, according to the latest data from the Q3-2009 MSA/Baron Outlook Report.
“Personal and multi-lines insurers experienced an underwriting loss of over $1.1 billion as at Sept. 30, 2009, a significant deterioration from the underwriting loss of $313 million they had at the same time last year,” MSA president Joel Baker wrote in the report.
Personal and multi-lines insurers posted a 106.4% combined ratio (COR) at the end of nine months in 2009, up from the 101.8% COR they posted after the first nine months of 2008.
On the flip side, “results for commercial writers are going the other way,” Baker wrote. “Results are showing improvement with a nine-month combined ratio for this group in the low 90s.”
Commercial insurers — excluding Insurance Corporation of B.C. (ICBC), Manitoba Public Insurance (MPI), SAF, Lloyd’s, most Autorité des marchés financiers (AMF)-regulated insurers and some other provincial writers —showed an underwriting income profit of $409.1 million after the first three months of 2009. This was an increase over the $168.6 million underwriting profit they made during the first three months of 2008. 
“Though some commercial writers were challenged by deteriorating property results (due more to economic reasons and fire rather than weather), casualty results remained in check as claims frequency and severity trends remained subdued for the most part.
“Pricing, on the other hand, has yet to be firm as competition remains very intense.”