Canadian Underwriter

In the Black

The Canadian property and casualty industry earned $4.5 billion in 2004, a strong consolidated result for the country's 206 carriers. But according to consumers' groups, some media and others, it's way too much by any measure. Remarkably (though, perhaps, not surprisingly) some still feel it necessary to point out that the industry's 2003 result was 671 per cent higher than 2002, and its 2004 result was higher than 2003. What they fail to mention is that 2002 was the worst year ever in the in...

Technology: Riding the Claims Curve

After several false starts, insurance companies in Canada are getting serious about revamping their claims processes to improve efficiency and provide quicker turnaround. Gone are the days of off-the-shelf technology products that held out high promises for property and casualty insurers but failed to deliver. Today, companies are much more realistic about integration with existing legacy systems and how their claims best practices must be built into any technology solution. In the claims con...

New Path to Health

Fuelling up for political glory, provincial governments continue to truck ahead with amendments to auto insurance regulations by introducing rate freezes, rate control grids and accident forgiveness, to name a few of the "mistakes" which Bill Star, president of Kingsway Financial Services Inc., says government bodies are implementing. Star is particularly concerned with the quality of bodily injury treatment available to claimants and the swelling costs of claims resulting from fraudulent as ...

A Systematic Approach

When the Nuclear Insurance Association of Canada (NIAC) went looking for a new policy issuance system last year, it knew what it wanted. Colleen DeMerchant, assistant manager of NIAC, says the association, which is a pool of insurance companies that provides coverage to nuclear facilities in Canada, previously operated on a Microsoft Office system which made use of familiar tools, such as Word and Excel. The system worked fine, but it had its limitations in terms of manual entry (and reentry)...

Rethinking Rate Regulation

The politics of rising insurance prices found their way into many political campaigns. Newly elected governments created new boards with rate-setting mandates or further expanded the powers of existing rate boards to oversee insurance prices on an ongoing basis. While this is not new, it is contrary to what is happening internationally where there is a movement away from more invasive and burdensome rate filing processes and insurance regulation practices toward a general rebalancing of regul...

Developing Website Strategies

A few of the biggest WWW ideas any insurance industry business in Canada should be aware of in order to make the best use of technology include: 1. Dump the heavy graphics and keep the most important infomration so obvious that a business or consumer visiting your Website gets there easily and fast. 2. Content is critical, but like bad taste, a website that does not feel right will distract. 3. Get over it - there is still a high degree of resistance to the changes the WWW is causing. 4. Ever...

Piecing It Together

Today, many insurance companies in Ontario have set deductibles at $300, in line with regulations introduced under the former auto insurance legislation Bill-59. Some companies are now looking at raising deductibles even higher to $500 or more. When you consider that the average auto glass claim is less than $500, it is not hard to see that glass repair and replacement could be moving quickly into the retail (i.e., non-insurance) arena. However, it is not just deductible levels that are chang...

Taking Collisions 'High Tech'

When Steve Sanderson, president of Accident Support Services, met with Al Cafik, president of the Canadian Insurance Claims Managers Association, and senior Toronto police officers, the goal was to identify an effective solution to investigating non-injury collisions. As a result of discussions between the industry and police authorities, it was agreed the introduction of CRCs was the best solution. The CROMS - collision reporting and occurrence management system - was also born out of the ne...

Dedicated Sales Approach

Few brokerages realize the significance of a separate business unit dedicated strictly to new business. The business development center (BDC) acknowledges the reality of AEs' strengths and thereby shore up their weaknesses with a highly disciplined approach to sales. This strategy creates a smoothly functioning sales system that ensures nothing slips through the cracks when it comes to targeted, highly profitable clients. The BDC is an important stage in taking sales to the next level and ach...

Marketwatch

Industry's Poor Public Image Remains Top Issue for Insurers

The intense regulatory scrutiny and plummeting consumer confidence that has dogged the property and casualty insurance industry since the onset of the most recent hard market were brought on by the collective actions of insurers, says Ellen Moore, president of Chubb Insurance Co. of Canada. Companies focused on getting business on the books and underwriting took a backseat in the years prior to the hard market of 2002-2004, notes Moore who was a guest speaker at the Insurance Institute of Ont...

Insurers Post Healthy Underwriting Gain for 1-Q

Canadian property and casualty insurers lifted net income for the first quarter of this year by 16% to $683.5 million compared with the $589.6 million reported for the same period in 2004, according to industry financial data collected by the Office of the Superintendent of Financial Services (OSFI). The OSFI data indicates that insurers' net profitability for the latest quarter was driven by a significant gain in underwriting while investment earnings declined and premium growth flattened.

Msa/Baron 2004 Report Confirms 'Down Cycle'

Despite the higher profitability achieved by Canadian property and casualty insurers for 2004, the industry is unlikely to maintain this earnings momentum through this year and into 2006, according to the recently released fourth quarter 2004 "MSA/Baron Outlook Report". The report expects that developing pricing weakness in commercial lines, combined with the auto rate rollbacks applied in most regions of the country, will ultimately undermine the industry's bottom-line.

Ing Posts Strong 1-Q Performance

ING Canada Inc. notched up a return on equity of 28.9% for the first quarter of this year with net income soaring by 38% to $158.5 million compared with the $115.1 million disclosed for the same period in 2004. Earnings clocked in at $1.19 a share for the latest reporting period, reflecting modest decline on last year's comparable quarter result of $1.23 a share. ING's strong earnings performance for 2005's first quarter is largely due to a significantly high underwriting profit of $114.9 mil...

Fairfax 1-Q Earnings Impacted by Market Softening

The company produced an under-writing gain of US$33.5 million from its ongoing operations for the first quarter of 2005 (2004 1-Q: US$44.4 million). All of the company's operations were able to reduce combined ratios to below 100%. Fairfax's combined ratio for the first-quarter 2005 clocked in at 96.7% (2004 1-Q: 95.7% ratio).

Kingsway Achieves Record 1-Q Underwriting Profit

Kingsway Financial Services Inc. brought homw an annualized return on equity (ROE) of 22.6% for the first quarter of 2005, showing a 5.7 percentage point gain on its 16.9% return achieved for the same period last year. The specialty risk insurer's net earnings for the first quarter of this year rose by 52% to $46.8 million compared with the $30.8 million reported a year ago.

Co-Operators Posts Modest 1-Q Earnings Growth

Mutual insurer, Co-operators General Insurance Co., lifted net earnings for the first quarter of this year by 6% to $36.5 million compared with the $34.4 million reported for the same period in 2004. The latest quarterly result equates to earnings of $1.75 a share versus the $1.65 a share shown for last year's first quarter.

Optimum General Sees 1-Q Earnings Boon

Quebec-based Optimum General Inc. lifted net income for the first quarter of this year by more than four times to $1.1 million compared with $259,000 reported for the same period in 2004.

R&Amp;S Canada 1-Q's Underwriting Jumps On Personal Lines

Royal & SunAlliance Canada produced an underwriting profit of $14 million for the first quarter of this year, signaling a significant turnaround in overall profitability from 2004's first quarter underwriting gain of $1 million....

Northbridge 1-Q Earnings Fueled by Investment Gains

The Northbridge operations also benefited from an overall 21.3% yearon-year rise in underwriting profit for the first quarter of this year, which clocked in at $24.6 million (2004 1-Q: $20.3 million). The improved underwriting result saw the company's combined ratio improve marginally to 91.4% for the latest reporting period compared with the 92.8% ratio shown at the end of 2004's first quarter.

Lindsey Morden 1-Q Earnings Rebound

International adjusting firm Lindsey Morden, which operates in Canada as Cunningham Lindsey, saw its earnings rebound for the first quarter of 2005 to $5.2 million versus a loss of $21.1 million reported for the same period a year ago. The company's turnaround was built on growth in international operations and also the end of the negative impact from discontinued and disposed operations.

Odyssey Re 1-Q Earnings Plummet

The Fairfax group's reinsurance operation, Odyssey Re Holdings Corp. saw net income for the first quarter of this year fall by 38.5% to US$36.2 million compared with the US$59 million reported for the same period in 2004. Odyssey Re's underwriting result for the first quarter if this year shows marked deterioration with the combined ratio clocking in at 99.4% against the 95% ratio shown at the end of 2004's first quarter.

Insight

Canadian Insurance Congress 2005: A Rocky Course

Speakers at this year's Canadian Insurance Congress were less than certain of the future financial prosperity of insurers as well as the large brokerage houses. The potential of new regulatory restrictions being introduced, coupled with the downward shift that has already become evident in the industry's pricing cycle, suggest that insurers' net earnings and capital surpluses will diminish greatly by 2006. However, the period in between will likely see increased merger and acquisition activit...

Moves & Views

On the Move

A new poll commissioned by 1-800-CARSTAR - a complimentary, toll-free 1-800 service providing 24-hour accident assistance recently revealed that 65% of Canadians have been involved in an auto vehicle accident and 82% found the experience to be stressful. Women were more likely to find the experience stressful (88%) than men (76%). The poll also found that more men (70%) than women (60%) have been involved in accidents. CARSTAR also reports the 35-49 age group has the highest accident rates, w...

Peripatetic Rep

A Matter of Percentages...

When the author pulled up to his boss Fred Wilson's house, the street was already filled with cars. This was the day of Fred's annual "pool-and-barbecue-bash" when Fred invited some of his insurance industry friends, associates and customers for an afternoon of great food, lavish refreshments and good-natured fun. Al said the application of common sense principles and practices is what insurance industry professionals need to concentrate on, whether one is companies brokers, adjusters or what...