By: Luke Jones, Published on May 25, 2017 03:37 PM, Last Update on May 25, 2017 12:39 PM
Canada’s insurance industry struggled to perform well during the first quarter of 2017. There was a 6.6% percent rise in the combined operating ratio during the opening three months of the year, 101.3% compared to 94.7% in Q1 2016. The numbers were delivered by MSA Research Inc. president and CEO Joel Baker on Wednesday.
Baker released the “sneak preview” of Q1 2017 results at a session titled Review of Industry Results and Outlook. He was speaking at the Canadian Insurance Financial Forum (CIFF) at the Metro Toronto Convention Centre, now in its 8th year.
Private and passenger auto insurance loss ratio “looks pretty alarming,” Baker said to conference attendees. The loss ratio for Newfoundland was 95%, Nova Scotia 88%, New Brunswick 88%, Ontario 81%, Alberta 84% and Prince Edward Island at 62%. “Overall, Canada is 82 on auto, which is pretty scary,” Baker added.
Regarding catastrophic, the first quarter of 2017 was hit by two major cats (defined as costs of more than $25 million): an Ontario windstorm in March and a Newfoundland and Labrador windstorm during the same month. One notable event (between $10 and $25 million) was also observed due to an Atlantic ice storm between January and February.
Canada’s insurance industry during Q1 had an overall loss ratio of 68.5%, up from 62.9% a year ago. Direct written premiums were up 2.9% during the same time. However, net premiums written decreased by 0.7%. “I presume as a part of the increase in reinsurance costs,” Baker said.
“In conclusion, not a great start to 2017,” Baker said. “The floods and cats are top of mind.”