The hard market is showing no signs of abating, with all provinces posting premium rate increases in personal lines in the latest quarter, according to Applied Systems’ most recent rating index.
Personal property premiums increased on average by 13.6% compared to the third quarter of 2018. Personal property premiums increased by 4% compared to Q2 2019. In personal auto, premiums were up 9.9% versus Q3 2018 and up 4% from the second quarter of 2019.
The Applied Rating Index measures trends in personal lines in Canada from an analysis of more than 1.3 billion quotes completed, representing over 80% of the independent brokerage market and 675 insurer rating plans written by brokers.
By province, Quebec experienced the most significant year-over-year average premium change for personal auto at 27.5% (also the most significant jump for the second quarter in a row at 9.8%). British Columbia experienced the largest year-over-year spike for personal property at 25.4%, noted the report, released Wednesday.
For personal property, all provinces except the four Atlantic ones experienced a rise in average premiums quarter or quarter.
“We are seeing that the personal lines market in each province continues to harden with rising premiums compared to Q3 of last year,” said Jeff Purdy, senior vice president of international operations at Applied.
Applied’s rating index doesn’t measure increases in commercial lines, but commercial brokers across the country are noticing reduced capacity and high rates for commercial insurance, the new president of Insurance Brokers Association of Canada told Canadian Underwriter recently. How long will it last? “We are probably expecting to see hardening market conditions continue into next year,” said Kent Rowe.
Jason Storah, CEO of Aviva Canada, said earlier this month that he doesn’t see the hard market lasting too long.
“I would say historically hard markets don’t last and our view is we will see this hard market hopefully through 2020,” Storah said. “I certainly am not expecting this to be a prolonged hard market,” he said, noting that market dynamics and some dynamics around capacity from the London market are having a knock-on impact in rates and hardening of the market here.
“But I fully expect whether it’s U.K. capacity or other capacity, we will see capacity come into this space going forward and that will put some downward pressure on the hardening market at some point.”