As we look back, 2003 was a challenging year for property and casualty insurers. Governments in four provinces introduced premium rollbacks or rate freezes. During the summer, insurers helped Canadians through the fires that ravaged British Columbia, and Hurricane Juan in Atlantic Canada. Facility Association, the auto insurance residual market, reported a loss of $550 million – – the second most expensive insured loss ever experienced in Canada.Battening down the hatches.
The last three years have been challenging times for the P&C insurance industry. As the industry weathered the storm of increasing claims costs, companies have been actively engaged in cost-cutting measures to compete more effectively. In times of uncertainty, insurers have taken action on the items they have control over- – their own expenses.
Year end 2003.
For the year, the industry returned to its average level of profitability with a return on equity of 11.3%. This improvement was due to improved underwriting results. Overall, the industry�s combined ratio improved from 105.8% to 98.7%. Personal property insurance markets remain strong with the loss ratio improving from 63.7% in 2002 to 61.9% in 2003. Commercial property markets also showed strength across the country with a loss ratio of 52.7%. This compares to 61.5% one year earlier.
Fixing the Roof:
It is illegal to drive a car in Canada without insurance. To ensure that affordable insurance coverage is available for everyone, insurers and government have created a number of mechanisms.
The last word�
Capital is the lifeblood of the insurance industry. Unfortunately, capital is a scare resource. An increase in the industry�s capital base allows insurers to increase the amount of insurance available in the market.
View IBC Perspective March 2004, pdf
Insurance Bureau of Canada is the national trade association of the private property and casualty insurance industry. It represents the companies that provide more than 90 per cent of the non-government home, car and business insurance in Canada. To view news releases and information, visit the media section of our web site at www.ibc.ca.