A.M. Best Company's. Insurance Market Briefing Canadian Property & Casualty. Joel Silverthorn Senior Financial Analyst

Transcription

1 A.M. Best Company's Insurance Market Briefing Canadian Property & Casualty Joel Silverthorn Senior Financial Analyst Jackie Lentz Senior Financial Analyst September 3,

2 Canadian P&C Industry Outlook Stable Risk-adjusted capitalization remains strong Operating profitability recorded in 2013 despite: Underwriting challenges Investment pressures Regulatory constraints Consolidation continues 2

3 Canadian P&C A.M. Best Rating Trends All ratings are Secure No rating downgrades for the fourth consecutive year Movement among rating categories continues due to consolidations / consistent operating performance Not anticipating significant number of rating changes 3

4 Canadian P&C Interactive Ratings Distribution Interactive Ratings Distribution ( *) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Vulnerable Good Excellent Superior 0% June 30, 2014* *Through June 30, All other years, as of year end. 4

5 Canadian P&C Rating Changes (Excluding CABS) At 12/31/2013 & 6/30/2014 Ranked by Net Premium Written Best s Financial Strength Rating 2 Previous Rating Rating Change Effective Date Net Premiums Written (C$ Millions) Rank Rating Change 1 As of December 31, 2013 AMB# Company Name Jevco Insurance Company A+ A 4/25/ COSECO Insurance Company B++ B+ 5/31/2013** Northbridge Personal Ins Corp. A A- 3/28/ Optimum Insurance Company Inc A- B++ 9/12/ Optimum West Insurance Company A- B++ 9/12/ Optimum Farm Insurance Inc A- B++ 9/12/ Transportation Prop & Cas Co A A- 6/27/ As of June 30, Travelers Insurance Company CA A++ A+ 5/23/ ACE INA Insurance A++ A+ 4/11/ * Rating Changes-Canada Property/Casualty excludes Canadian branches. ** Rating was withdrawn (NR-4) on 5/13/2013 following the upgrade. 1 (+) Rating upgrades; (-) Rating downgrades 2 For Best s Rating criteria and definitions visit 5

6 Canadian P&C Market Share (all lines) 2013 Rest of Industry 54% Intact Insurance Group 17% Aviva Canada Group 9% Meloche Monnex /TD 7% 2007 Rest of Industry 64% ING Canada Group 11% Aviva Canada Group 9% Co-operators Group 6% Economical Group 5% RSA Insurance Group plc Wawanesa 7% Mutual 6% Meloche Monnex /TD 5% 6

7 Canadian P&C - Risk Adjusted Capitalization Best Capital Adequacy Ratio (BCAR) Weighted Averages Excludes Lloyd's CAB and ICBC 7

8 Canadian P&C Combined Ratios (excluding ICBC & Lloyds CAB) Est.June

9 Canadian P&C Operating Ratios (excluding ICBC & Lloyds CAB) Est.June

10 Canadian P&C Automobile Net Loss Ratio Trend Auto - Liability Auto - Personal Acc ident Loss Ratio (%) Q 2014 *Excludes Lloyd's CAB & ICBC 10

11 Canadian P&C Catastrophe Losses Ranked by insured losses in current dollars Insured losses (C$ Million) Current Year Date Location Event Loss + LAE dollars 1999 February Quebec, Ontario, New Brunswick Ice storm 1,574 2, June Alberta Heavy rains/flooding 1,740 1, July Toronto Heavy rains/flooding May Slave Lake AB Fire August Ontario Wind/Rainstorm July Calgary and Southern Alberta Wind/Thunderstorm August Calgary Flooding/Hail/Wind Sept. 7 Calgary Hail July Ontario Heavy rains June 6-8 & June Alberta Flooding Source: A.M. Best research *Cat losses in Canada during the first half of 2014 fell 98% over last year, with only two cat events designated so farone estimated at $34 million in insured losses, the other is not available yet. 11

12 Canadian P&C Personal Property Net Loss Ratios Q 2014 *Excludes Lloyd's CAB & ICBC

13 Canadian P&C Commercial Property Net Loss Ratios Q 2014 *Excludes Lloyd's CAB & ICBC 13

14 Canadian P/ C N et Investment Income vs. N et Investment Yield 3.4 Net Investment Income ($C Billions) Net Investment Yield 5.0 Net Investment Income (C$ Billions) Net Investment Yield (%) 2.0 *Excludes Lloyds CAB & ICBC

15 Canadian P&C Key Future Issues Risk Management & Underwriting Leveraging Big Data Use of technology Ontario Auto Rate Reductions Demutualization Consolidations 15

16 Questions? 16