January 10, 2003 by Canadian Underwriter
A new study suggests that the auto insurance market will be no kinder to insurers south of the border than it has been to Canadian companies. in “Caution Flag for Personal Automobile Insurance”, research firm Conning says that the poor returns of the past almost decade will not change in the coming years.
Calling past results in the line “mediocre”, Conning says that this trend will continue through 2007 and will be particularly trying for weak to middling companies. The auto sales market is expected to flatten while claims losses are expected to rise, while premium rates will likely not rise beyond 2003, conditions that will make it difficult to grow business, Conning expects. In fact, Conning expects that 2004 will see a return to competitive pricing in auto insurance, and the drive to marketshare resuming.
The study shows also that between 1993 and 2001, personal auto premiums grew by 45.7%, while the U.S. gross domestic product outpaced this at 59.6%.