RBC reports $958 million in P&C insurance revenue in 2015

The Royal Bank of Canada reported Wednesday its property and casualty insurance revenues from Canada were $958 million in the year ending Oct. 31, essentially unchanged from $951 million in 2014.

Toronto-based RBC writes P&C insurance through RBC General Insurance, which ranked 15th in 2014 – by net premiums written – in the Canadian Underwriter statistical issue.

RBC – Canada’s largest bank when measured by revenue – also writes health, travel, wealth, group and reinsurance. RBC reported net earned premiums of $3.507 billion in 2015, down from $3.742 billion in 2014.

Total revenue from insurance was $4.436 billion in the year ending Oct. 31, 2015, down 11% from $4.964 billion during the previous year.

This decrease was “mainly due to a reduction of $463 million related to the change in fair value of investments backing our policyholder liabilities resulting from changes in long-term interest rates, and a reduction of revenue related to our retrocession contracts, both of which were largely offset in (policyholders benefits, claims and acquisition expenses),” RBC reported Wednesday. “These factors were partially offset by business growth in Canadian and International insurance, and the positive impact of foreign exchange translation.”

Toronto Dominion Bank – which provides home and auto insurance through Meloche Monnex Inc. – is scheduled to release its financial results Thursday. TD Insurance ranked third in P&C (behind Intact and Aviva), in 2014, in Canadian Underwriter’s Statistical issue. The 2014 figures count Desjardins and State Farm Canada separately, but Desjardins has since acquired State Farm’s Canadian and is now essentially tied with Aviva in second place.

The Bank of Montreal does not sell either home or auto insurance while the Bank of Nova Scotia and the Canadian Imperial Bank of Commerce sell home and auto coverage underwritten by insurers owned by Desjardins.

In the year ending Oct. 31, RBC reported $2.725 billion in revenue from Canadian insurance and $1.711 billion in international insurance. Outside Canada, RBC provides life, accident and annuity reinsurance.

In Canada, RBC sells insurance through its retail insurance branches, field sales representatives, advice centres and online, as well as through independent advisors and affinity relationships.

“The global insurance industry has adjusted to the effects of the economic crisis such as slow economic growth rates, persistently low interest rates and low inflation rates, and continues to stabilize,” RBC stated in its management discussion and analysis for 2015. “The approach of many insurance companies has been to review product features/ pricing, conserve capital and reduce expenses. Although these factors continue to put strain on our businesses, product and pricing actions we have taken in recent years, a migration to lower-cost proprietary distribution channels, conservative investment practices and diversified product lines have allowed us to continue to navigate this challenging environment.”

For the three months ending Oct. 31, RBC reported net income in insurance of $225 million, down 12% from $256 million in the same period in 2014, “mainly due to a change in Canadian tax legislation impacting certain foreign affiliates which became effective November 1, 2014.”

For the entire bank, RBC reported net income of $10.026 billion on revenue of $35.321 billion in the year ending Oct. 31, compared to net income of $9 billion on revenue of $34.108 billion in the same period in 2013-14.

For the most recent quarter, RBC reported net income of $2.593 billion on revenue of $8.019 billion, compared to net income of $2.333 billion on revenue of $8.382 billion in the same period in 2014.