By: Luke Jones, Published on September 28, 2017 11:09 AM, Last Update on September 28, 2017 08:11 AM
Canada’s property and casualty insurance industry had a combined ratio improved 7.06% during the second quarter of 2017, moving to 97.71% compared to 104.77% year-on-year. The data was published today by the MSA Quarterly Outlook Report, released on Thursday.
“What a difference a year makes!” said Joel Baker, president and CEO of MSA Research Inc., in the report. “At six months 2016, the industry was reeling from the historic Fort McMurray fire losses. Now, with a more normal CAT year (Atlantic hurricanes notwithstanding), the market has largely strengthened its footing with a 7-point improvement in COR to 97.7% and improvement in investment income marred only by an adverse $0.5 billion swing in [other comprehensive income].”
Baker does warn that the state of the market is more detailed than the combined ratio suggests, mostly due to variations in sectors and regions.
“Furthermore, when we look at the results on an accident-year basis (without the benefit of prior-period favourable development), the entire industry is still in the red on an underwriting basis.”
Direct premiums written for the total industry were $27.1 billion, an increase from $26.1 billion from the second quarter a year ago. During Q2 2017, net premiums ended on $24.6 billion, up from $23.9 billion compared to Q2 2016.
“Unlike the other sectors, personal and multi-line insurers showed results that were not much better than 2016, despite the absence of the Fort McMurray losses,” the report noted.