Continued improvement in Canadian commercial property line

In 2003, Canadian commercial property writers saw across-the-board improvement with rising rates and declining loss ratios, according to a new report by A.M. Best.Best’s data shows the net loss ratio in commercial property dropped to 49.5% in 2003, a 12.3 % improvement over the 61.8% posted in 2002. Direct written premiums were up 10.4% year-over-year, following a 30% rise in 2002. And net written premiums were up almost 21% last year, with many companies increasing retentions and restructuring reinsurance agreements to deal with rising costs, the study notes. “The improvement resulted from hard market pricing on the direct and reinsurance sides, as well as a leveling off of incurred claims,” the report ntoes. “Canadian companies improved underwriting results on commercial property in most every province, as well as on business produced outside of Canada.”The top 25 commercial property writers, who account for 84% of the market, saw direct written premiums jump 10.8% in 2003, and their net loss ratio drop 10.0% on average.For 2004, A.M. Best predicts more competitive pricing, with premium growth dropping to between 5-6%. Improvement will only be sustained if pricing discipline remains and rates outpace claims growth.The top five writers are ING Insurance Co. of Canada, American Home Assurance Co., Commonwealth Insurance Co., Aviva Canada, and Zurich Insurance Co.In total, commercial property accounts for about 15.8% of the Canadian p&c market.