Canadian P&C insurers’ premium growth flatlining

Canadian property and casualty direct premiums in 2006 “were essentially flat, growing only an anemic 1%,” according to a report by MSA Research Inc.

MSA Research noted that in 2006, direct premiums written in Canada totalled Cdn$30.1 billion, as opposed to the 2005 total of Cdn$29.8 billion.

Net premiums written amounted to Cdn$27.2 billion in 2006, compared to Cdn$26.1 billion in 2005, representing a growth rate of 3.9%

But among its nine key observations, MSA Research noted that the 2006 “growth in net premiums written of 3.9% reflects lower cessions to reinsurers, rather than underlying growth.”

MSA Research further observed that underwriting income is “relatively flat” in 2006, whereas investment income increased almost 16% Reflecting this, “net income for the companies represented here [in the data] grew by 3.4%,” MSA notes.

Data contained in the 2006 report came from 119 Canadian insurers, as filed with MSA through Mar. 14, 2007.

MSA further observed, there were “no dramatic system-wide shifts in overall net loss, expense and combined ratios” last year. The survey shows the industry’s combined ratio was 92.4% in 2006, as opposed to 92.2% in 2005.

There were improvements in personal property, commercial property and liability loss ratios. Also, there was a “slight deterioration” in Canada-wide auto loss ratios.

MSA’s report is posted at http://www.msaresearch.com.