Quebec insurers’ results exceeding historical returns despite lower profits in 2011: AMF

Quebec’s regulatory and oversight body for the financial sector points to a favourable trend continuing despite automobile insurers achieving lower profits on premiums written in 2011 than in 2010.

Despite lower profits, insurers are maintaining results that exceed historical returns generally expected by insurers, since claim frequency remains relatively low notwithstanding the increase observed in 2011, notes a report by the Autorité des marchés financiers (AMF), tabled yesterday in the Québec National Assembly.

Profits were 12.3% of premiums written last year, down from 15.1% in 2010, the report states.

“This can be explained in part by increased payouts following occurrences suffered in 2011, including the flooding in Montérégie and Gatineau and Hurricane Irene,” AMF says of the lower profits.

The level of premiums written in 2011 remained the same as in 2010, adds an AMF press release.

The market remains competitive, partly because of a downward movement in rates for the ninth consecutive year and a growing number of insurers operating in all sectors of automobile insurance, the statement adds. Québec-chartered insurers had 64% of the $3.1-billion of automobile insurance premiums written in Quebec in 2011.