Soft market looms for Canadian insurers

North America

AM Best has warned the Canadian insurance market that a prolonged soft market could be around the corner. Assigning a stable outlook to the market, AM Best said Canadian insurers have prospered over the past few years with profitable underwriting combining with growth in investment income and capital gains to boost net income. Last year, the market’s net underwriting income totalled C$28bn and net premiums earned of C$30.8bn, producing an underwriting ratio of 91.5. However, larger companies are pursuing market share and AM Best says “abundant margin in the industry is setting insurers up for a soft market cycle”.