Insurance News

There was the biggest-ever deal. The biggest shareholder challenge in recent memory. And some of the biggest natural catastrophe losses to go along with them. 2011 will be remembered for many big events, but perhaps the most important for p&c insurers was their gaining the ear of government on the biggest issue affecting the biggest segment of the industry. With the Ontario auto insurance market making up roughly a quarter of all Canadian p&c premiums, losses of more than $1.5bn for the segment in 2010 left insurers with a big hole to fill as this year began. Although not yet profitable, there were signs that this market segment may be turning the corner.     And while public perception has continued to challenge insurers with concerns expressed in the mainstream media about overall profits — however meagre they may be — the auto insurers now have government data to back up their claims about fraudulent claims in Ontario.     “Is it reasonable that accidents are down while claims (costs) have increased?,” IBC Ontario vp Ralph Palumbo asked earlier this month after the province’s auditor general noted a 150% increase in claims costs from 2005 to 2010 while the number of injury claims rose only 30%. “It just doesn’t add up.”

 The biggest p&c deal ever was struck in May as the country’s largest insurer, Intact Financial, became larger with its $2.6bn takeover of AXA — then Canada’s sixth-largest p&c group. The merger gives Intact roughly 17% of the entire p&c market in Canada.  Despite the loss of a major market, most brokers took some comfort in the increased Canadian content of the nation’s No. 1 p&c insurer. And then, of course, there was the move to demutualize Economical, which undoubtedly would have been the biggest story of the year if it had turned out differently. A bid by a dissident group of voting policyholders to replace the company’s board of directors amid a move to tap the insurer’s assets was stopped at a special meeting in Kitchener in May. While defeated in its bid for control of the board, the dissident shareholders nevertheless helped spur action for federal rules — expected next year — for mutual p&c companies to change their structure.