Canadian insurance sector not likely to achieve rapid growth: U.K. research firm

The Canadian insurance sector faces two challenges in a global context — it is unlikely to achieve rapid growth and as investors, Canadian insurers are now too large to emerge unscathed from any financial crisis, reports companiesandmarkets.com.Companiesandmarkets.com is a U.K.-based online repository of market research reports.In its first analysis of the Canadian insurance market, it noted that a key factor in the strength of the Canadian insurance sector has been the regulatory environment.But, the Canadian insurance is “mature and competitive” and “it is unlikely to achieve rapid growth through our forecast period — this is in spite of its advantages and a generally favourable outlook for the Canadian economy,” the report said.“Although both non-life and life insurance is open to foreign companies, we note that many of the deals that have taken place in recent years have involved sales of Canadian operations by foreign groups who have decided that those businesses are not central to their overall strategies.”The second challenge is that, as investors, Canadian insurers are now so large in a global context that it would be difficult for them to emerge unscathed from any new financial crisis. “However, as noted above, Canadian insurers have handled the global financial crisis and its aftermath well.”The report also noted that the non-life sector is highly fragmented with no single player appearing to have double-digit market share.“One consequence of the fragmentation and lingering mutualisation of the Canadian non-life segment is that the Canadian property and casualty insurers have had less desire and need than the life companies to seek challenges and opportunities in other countries.”