S&P Sees ‘Highs and Lows’ for Canadian P/C Insurers

As 2011 winds down, Canadian property and casualty (P&C) insurers can “list some notable lows and highs during the year, including unusually large catastrophe losses from wildfires in Slave Lake, Alta., and improved performance in the Ontario auto segment, thanks to provincial reforms,” according to a report from Standard & Poor’s.

The report – “Credit Fundamentals For Canadian Property And Casualty Insurance Industry Are Stable, But Challenges Remain” – pointed out that Canadian P&C insurers “expected Ontario auto reforms and higher pricing in personal lines to lift industry underwriting results going into 2011, but high catastrophe activity, relative softness in commercial lines pricing, and low interest rates offset the results.”

As of third-quarter 2011, the industry net performance” seems to be tracking pretty much at the same level as that of the prior year period and the final results for 2011 may not be much different from 2010,” S&P said. Credit analyst Hardeep Manku added: “In spite of that, we believe industry performance has probably hit bottom and results could improve in 2012.”

S&P said it views the credit fundamentals of the overall Canadian P&C industry as stable and expects minimal changes to ratings. “However, we believe P&C insurers will need to focus on underwriting profitability, since economic and industry-specific concerns, such as low investment yields and pricing adequacy, are likely to continue in the new year,” Manku added.

The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com . Ratings information can also be found on Standard & Poor’s public Web site by using the Ratings search box located in the left column at www.standardandpoors.com.

Source: Standard & Poor’s

Topics Carriers Property Casualty Canada