How reinsurers are sizing up Canada

Reinsurers may start to view the great white north as an attractive market after the most recent Jan.1 2024 reinsurance renewal, one reinsurer shared at Cat IQ Connect in Toronto. 

During the Renewals Season Recap discussion, moderator Donna Ince, senior vice president and chief underwriting officer for personal insurance at Definity Financial Corporation, asked how reinsurers prioritized their capital allocation in this last cycle. 

Simply put, Olivier Gay, president, CEO and chief underwriting officer at SCOR Canada said, “we prioritize capital allocation where we can maximize the returns.  

“The current cycle is very attractive,” he said. “In general, I would say that Canada is a very attractive market for the reinsurance world. It’s a mature market. Basically, when you compare it to the other markets or the other regions, I would say that Canada is much more advanced.” 

Part of that comes down to policy wordings, Gay said.  

“When I share with my counterparts in the rest of the world the discussion I had on wordings, it was nothing compared to Canada,” he said. “All the work that has been done by the industry…over the last years, has prepared this kind of smooth landing on wordings.” 

For example, he said, “We don’t [use] an atmospheric disturbance to cover all events that trigger wind, floods, cloudbursts, or any such things, but it’s much more stable than from what I’ve seen elsewhere.” 

But maintaining relations between reinsurers and carriers requires a pragmatic approach, Noted Gus Katsuras, executive vice president and head of property at Gallagher Re Canada.  

Compared to the U.S., he said, it’s a different market.

“A reinsurer can come off a program and then redeploy elsewhere quite easily. Whereas here, I think the focus is for reinsurers to grow organically, together, with their clients. If reinsurers or even companies…are being opportunistic, you stand out; and you don’t want to stand out in the negative way.

“Canada’s a great…market,” he added. “But compared to our neighbors to the south, it’s relatively small, and reinsurers have capacity here that must be deployed locally to support Canadian-domiciled companies. As we know, a lot of companies focus on supporting the local domestic reinsurers, or other Canadian licensed insurers. In Canada, what builds that relationship is that common understanding.” 

 

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