By: Luke Jones, Published on January 28, 2018 10:15 AM, Last Update on January 28, 2018 07:16 AM
Consumers in Canada can expect to pay more for their auto and home insurance this year if catastrophic losses from 2017 match predictions. Philip Cook, CEO of Omega Insurance Holdings Inc., offered the advice at his annual Industry Trends breakfast speech at the National Club on Bay Street in Toronto.
“I do expect that as this year unfolds, unless we have a very benign 2018, we do expect there will be some rate change and increase at the primary level [in Canada] going forward,” Cook said.
Reinsurance rates are widely expected rise during renewals, Cook explained. During 2017, Canadian insurance companies paid catastrophe claims in excess of $1 billion, only a handful of times the industry has topped that level. Cook says normally there are one or two significant events (2016’s Fort McMurray for example) that make up the majority of CAT claims. 2017 was different, with numerous events contributing to the $1 billion claims amount.
Cook suggests the Canadian home and auto insurance industry cannot sustain continuous loss bills of over $1 billion without increasing premiums to cover the costs.
“The Canadian insurance industry absorbed them with no significant impact at all,” Cook said. “Despite the significant number of cat losses, the primary industry still made a profit in 2017, which speaks to our resilience and our very strong financial strength.”
“There will probably be some hardening of [reinsurance] rates,” Cook added.