OSFI 2008 year-end results show insurers taking a loss in the auto personal accident category

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 as166% 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%. Meanwhile, profits for Canadian and foreign insurers in 2008 were about half of what they were in 2007. The net income for Canadian and foreign property and casualty companies reporting to OSFI totalled just over Cdn$2.2 billion in 2008, down considerably from the Cdn$4.9 billion profits the same companies reported in 2007.The industry’s collective net investment income dropped from just over Cdn$4 billion in 2007 to slightly more than Cdn$2.7 billion in 2008. In the personal property area, claims ratios for Canadian P&C 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.