CANADIAN P/C SECTOR REMAINS WEAK, SAYS IBC REPORT

The Canadian p/c industry has seen an improvement in rates this year, but earnings remain alarmingly weak, according to the Insurance Bureau of Canada’s (IBC) quarterly analysis of the industry. The IBC said that earned premiums have increased by 7.4% over the past four quarters, against a 4.4% increase in claims costs, marking the first time in five years that revenues have exceeded claims costs. In the first quarter of the year, however, the industry’s combined ratio was still a high 108.9%, while its return on equity was just 3%. The IBC said that a continuation of that pace would make 2002 the industry’s second-worst on record. Last year was the industry’s worst, the IBC said. The highest increase in claims has been seen by motor writers in Ontario, Alberta and the Atlantic provinces. The most financially sound market is in Quebec, the bureau said.