Canadian Market (April 01, 2009)

ABOUT HALF OF CANADIAN P&C INSURERS POST UNDERWRITING LOSS IN 2008

More than half (55%) of the 141 insurance companies reporting 2008 year-end data to MSA Research posted an underwriting income loss for the year.

Sixty-eight of the 141 companies reported a combined ratio of 100% or more.

MSA Research has posted a summary of the 2008 yearend results on its Web site. The summary represents 93% of the Canadian property and casualty industry.

The following is a sample of the 2008 year-end results of the Top 6 individual companies that reported more than Cdn$1 billion in net premiums written (in order of net premium written):

Intact Insurance Company of Canada (formerly ING Insurance Company of Canada)

Net Premium Written: Cdn$1.6 billion

Underwriting Income: Cdn$26.8 million profit Net Income: Cdn$46.8 million Combined Ratio: 98.34%

Wawanesa Mutual Insurance Company

Net Premium Written: Cdn$1.6 billion

Underwriting Income: Cdn$79.8 million loss Net Income: Cdn$19 million Combined Ratio: 105.09%

Economical Mutual

Net Premium Written: Cdn$1.44 billion Underwriting Income: Cdn$163.5 million loss Net Income: Cdn$102 million loss

Combined Ratio: 111.41%

Aviva Insurance Company of Canada

Net Premium Written: Cdn$1.4 billion

Underwriting Income: Cdn$25.6 million loss

Net Income: Cdn$99.3 million Combined Ratio: 101.96%

Co-operators General Insurance Company

Net Premium Written: Cdn$1.4 billion

Underwriting Income: Cdn$74.5 million loss Net Income: Cdn$62 million Combined Ratio: 105.5%

Nordic Insurance Company (ING Canada)

Net Premium Written: Cdn$1.4 billion

Underwriting Income: Cdn$22.8 million profit Net Income: Cdn$6.8 million Combined Ratio: 98.34%.

CANADIAN P&C INSURERS STRUGGLE WITH AUTO LINES IN 2008

Federally regulated Canadian and foreign property and casualty companies took a beating last year in auto lines, particularly in the personal accident category, according to 2008 figures posted by the Office of the Superintendent of Financial Institutions (OSFI).

OSFI figures show that in the auto personal accident category, which includes accident benefits, Canadian insurers collectively reported a claims ratio of 109% in 2008 (87.8% in 2007) — a figure that climbs as high as 166% for foreign insurers (149.7% in 2007).

Claims ratios for auto liability, in contrast, increased modestly from 64% to 67.9% for Canadian property and casualty insurers between 2007 and 2008. For foreign insurers, the claims ratio for auto liability increased from roughly 69% to 78.7%.

In the personal property area, claims ratios for Canadian property and casualty insurers jumped from 66.9% in 2007 to 75.77% in 2008, due in part to a record number of storms across Canada. For foreign insurers, claims ratios on the personal property side jumped from 66.2% to 75.1%.

In commercial lines, claims ratios for Canadian insurers jumped from 57.8% to 68.3%. For foreign insurers, claims ratios increased from 45.5% in 2007 to 58.3% in 2008.