Canadian Underwriter

Say what you want about the hard market, it’s working

March 22, 2022   by David Gambrill

Man rolling red ball up a mountain. Conquering adversity.

Print this page Share

The hard market may be the biggest challenge facing the broker channel, according to Canadian Underwriter‘s 2022 National Broker Survey, but statistics show it’s vastly improved the P&C industry’s financial health.

Canada’s property and casualty insurance industry reported an underwriting profit of almost $7.6 billion in 2021, according to statements released today by the Office of the Superintendent of Financial Institutions.

That’s a 291% increase over the underwriting profit of $1.93 billion in 2020, and a stratospheric performance compared to the paltry underwriting income of $457 million reported during the first year of the pandemic.

Net premiums written of $64.9 billion amounted to a 24% increase over the $52.3 billion taken in during the same time last year.

As of press time, due to technical issues, the premiums earned and claims incurred statements from foreign, federally-licensed insurers were not accessible via OSFI’s website. That means the full industry’s numbers for specific classes of business were not available.

However, Canadian Underwriter was able to access statistics for federally-licensed Canadian insurers. Although they paint an incomplete portrait, they show some promising numbers across some business classes over the past two years of the pandemic. They also suggest that some “problem child” classes of business are getting worse.

In commercial property lines, in particular, Canadian insurers reported a loss ratio falling from 64.77% in 2020 to 49.02% in 2021. Some brokers have attributed the 32% decrease to risk mitigation efforts that are paying off.

In the auto-private passenger class, the loss ratio for Canadian insurers fell 10 percentage points – from 71.88% to 61.4%. The fact that people were driving less often during the pandemic because of business lockdowns almost certainly contributed to that.

But in spite of the good news, some “problem child” classes of business appeared to fare worse last year instead of better.

Cyber insurance, perhaps the hardest of all hard markets in Canada, officially plunged into unprofitability last year for Canadian-based carriers. (Foreign insurers have tended to take the bulk of the hit in cyber losses). Last year, Canadian-based cyber insurers recorded a loss ratio – measured by dividing claims costs by premiums earned – of 105.39%, a 34% increase over the same period the previous year.

Liability for directors and officers’ insurance has spiked, with the loss ratio ballooning to 87.5% in 2021 from 50.5% the year before — a 73% increase.

And commercial general liability (CGL) policies for businesses took a hit last year, with the loss ratio for CGL (with products) escalating from 59.44% in 2020 to 79.84% last year.

We’ll update the full industry numbers when they are available from OSFI.


Feature image courtesy of