Canadian Market (July 01, 2009)

CANADIAN COMPANIES FALLING BEHIND IN IFRS CONVERSION PROCESS

Despite the fast-approaching Jan. 1, 2011 deadline for the implementation of international financial reporting standards (IFRS), more than 12% of public companies and 20% of the private companies surveyed by PricewaterhouseCoopers have not yet taken the first step in the conversion process.

PwC surveyed 256 companies — 147 of which were public, 51 were private and 28 were Crown corporations.

About 80% of public companies remain short of the halfway mark of the overall conversion process, the survey found. Private companies were lagging behind public companies, with 51% of the private companies saying that only 20% of their conversion process was complete

CREDIT INSURANCE AMONG FEW LINES EXPERIENCING RATE CUTBACKS IN CANADA

The only product in the Canadian (re)insurance market experiencing cutbacks is credit insurance, said Jack Lee, national marketing manager at BFL Canada, in BFL’s publication The Cover Note.

In a question-and-answer section on the state of the (re)insurance market, Lee also commented that: “One would also expect directors’ and officers’ coverage to show caution, but insurers are actually becoming aggressive due to the number of markets wanting to grow their portfolios.”

Lee also told The Cover Note that Canada’s commercial markets are generally seeking modest rate increases in property, with casualty remaining flat.

“Our market remains very diverse and there is plenty of capacity and competition,” Lee said. “Underwriters want and need premium increases. Choice accounts, however, are still desirable and competition remains fervent.”

Lee said he expects to see considerable pressure in pricing by 2009 Q3 if the first six months of the year do not see improvement.

ALBERTANS GENERALLY NOT SEEKING COMPETITIVE AUTO QUOTES

65% of Albertans have not sought competitive auto quotes in two years. Sixty-five per cent of survey respondents living in Alberta indicated they had not sought competitive auto insurance quotes in the past two years, according to a 2009 public perception survey commissioned by the Alberta Automobile Insurance Rate Board (AIRB).

The survey included 800 interviews of adult Alberta residents, resulting in a 3.5% margin of error, accurate 19 times out of 20.

Of the 35 % of respondents that did seek competitive quotes, most got only two or three quotes before proceeding to purchase.

A majority (63%) of the quote-seekers said they obtained their quotes by means of telephone calls to brokers (down from 71% in 2008)”