Commercial property writers in Canada saw better underwriting results for the second consecutive year in 2003, as the line’s net loss ratio decreased about 12.3 points to 49.5 from 61.8 in 2002, according to a study by A.M. Best Company. The improvement resulted from hard-market pricing on the direct and reinsurance sides, as well as a leveling off of incurred claims.
Commercial property generated about 15.8% of the Canadian property/casualty industry’s direct premiums in 2003. Direct premiums written on this line increased 10.4% in 2003 after rising about 30% in 2002.
But commercial property writers’ net premiums written increased nearly 21% in 2003, as many companies increased retentions and restructured their reinsurance in the face of rising costs. Canada’s 25 largest commercial property writers by direct premiums written saw that line’s direct premiums written increase 10.8% and the net loss ratio decrease by 10.0 points on average in 2003. Commercial property premiums increased by 20% or more for nearly half of these companies.
A.M. Best expects pricing to become more competitive in 2004, with premium growth averaging 5% to 6% for commercial property.
Nonsubscribers can download a PDF copy of the full study (three pages) for $25 or a combination of the PDF copy plus the spreadsheet file of the study data for $50 from our Web site at www.bestweek.com. Call customer service for more information at (908) 439-2200, ext. 5742.
A.M. Best Co., established in 1899, is the world’s oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best’s Web site at www.ambest.com.
CONTACT: A.M. Best Co.Public RelationsJim Peavy, 908-439-2200, ext. firstname.lastname@example.org ORRachelle Striegel, 908-439-2200, ext. email@example.com ORAnalystCharles Huber, 908-439-2200, ext. firstname.lastname@example.org
July 12, 2004
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