A review of the Canadian insurance industry in 2001: SwissRe Canada

“It’s always darkest before the dawn.” With a rolling 12-month return on equity
(4Q2000 to 3Q2001) of 1.8 per cent – the lowest in history – it most certainly is dark for the Canadian P&C
industry. But there is a sign or two that the industry may soon see the sun begin to peak its head over the
horizon. First, although the Toronto Stock Exchange 300 composite closed the year down 13.9 per cent (its worst
showing since the recession in 1990 when it fell 18 per cent), about half of the companies within the index
still managed to post gains, and 11 of 14 sectors were up. Second, after several years of near-flatlining,
top-line growth is back, with direct written premiums up 12.4 per cent year-over-year. The year was, for the
most part, typically Canadian, with the 12-months marked by very little from a major manmade catastrophe or
an extreme weather perspective, and almost nothing from an M&A standpoint (at least until late November).
Instead, the year continued to showcase the fundamental problems that plague the industry in Canada:
oversaturation, pricing and expense problems, legislative issues, and weak investment markets, to name but a few.

Included in the “review” is “recap,” a synopsis of current insurance-related
news both in Canada and around the world. “recap” includes information on such areas as “Mergers,
acquisitions and industry updates,” “Liability, court awards and settlements,” “Accidents
and natural catastrophes,” plus other notable industry developments.

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