Canadian Property/Casualty Insurance Segment Resilient Against Pandemic

Best’s Market Segment Report

Oldwick, NJ (Sept. 15, 2021) – Canadian insurance companies’ ability to absorb the volatility caused by the pandemic has led AM Best to maintain its stable outlook on the country’s property/casualty segment and revise its life/annuity outlook back to stable from negative. Additionally, according to AM Best’s annual review of Canada’s insurance industry, short- to medium-term economic prospects are positive, with government measures likely to cushion any future jolts.

In its new Best’s Market Segment Report, titled, “Canada Insurance: P&C Segment Remains Resilient, L&A Segment Outlook Turns to Stable,” AM Best states that the country’s overall insurance industry remains well-capitalized. The underwriting performance of Canada’s property/casualty industry overall has been consistent in recent years, and even through year-end 2020, despite the unique challenges presented by COVID-19, as well as growing market and weather-related pressures.

The property/casualty segment saw a significant increase in pre-tax operating income at just over 80%. After capital gains, increases in fair value, and the impact of income tax, net income increased by over CAD 2.1 billion from year-end 2019, to CAD 4.7 billion.

AM Best revised its outlook on Canada’s life and annuity industry to negative in 2020, owing to the significant disruption caused by the COVID-19 outbreak. The revision back to stable is reflective of companies’ ability to navigate the stressed operating environment. Additionally, the impact of the pandemic on the financial markets was more muted and of shorter duration than anticipated, resulting in a smaller impact to insurers’ profitability, which helped stabilize the industry’s balance sheets. Pretax net income for Canada’s life insurance companies fell by just 6% in 2020 to CAD 13.8 billion. The report notes that the current situation remains very fluid, and an increase in credit defaults by weaker companies that rely more heavily on debt and have limited liquidity could still impact insurers’ investment performance. In AM Best’s view, these risks are more muted than they were a year ago.

To access the full copy of this market segment report, please click here.

A short video interview with AM Best Associate Director Raymond Thomson (property/casualty) is available here.

A short video interview with Senior Financial Analyst Anthony McSwieney (life/annuity) is available here.

About A.M. Best

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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