Reinsurance in Canada, Key Trends and Opportunities to 2017 by Timetric

VIEWS: 1 PAGES: 73

Canadian reinsurance providers recorded negative premium growth during the review period, as a result of low premium growth registered by Canadian insurers which forced them to cut their reinsurance expenses, a low reinsurance-ceding trend, and weak economic development. Written premium in the Canadian reinsurance segment fell from CAD32.8 billion (US$30.7 billion) in 2008 to CAD26.2 billion (US$26.2 billion) in 2012, at a compound annual growth rate (CAGR) of -5.5% during the review period (2008–2012).

More Info
									Reinsurance in Canada, Key
Trends and Opportunities to 2017
Market Intelligence Report

Reference code: IS0498MR

Published: January 2014

www.timetric.com




Timetric

John Carpenter House

7 Carmelite Street

London EC4Y 0BS

UK

Tel: +44 (0)20 7936 6400

Fax: +44 (0)20 7336 6813




                             www.timetric.com
 EXECUTIVE SUMMARY




1 Executive Summary
        Canadian reinsurance providers recorded negative premium growth during the review period, as a result
        of low premium growth registered by Canadian insurers which forced them to cut their reinsurance
        expenses, a low reinsurance-ceding trend, and weak economic development. Written premium in the
        Canadian reinsurance segment fell from CAD32.8 billion (US$30.7 billion) in 2008 to CAD26.2 billion
        (US$26.2 billion) in 2012, at a compound annual growth rate (CAGR) of -5.5% during the review period
        (2008–2012).
        Natural disasters are expected to generate more reinsurance business
        Canada’s susceptibility to floods, hailstorms, tornadoes and thunderstorms means insurance providers in
        the country, especially those offering property and casualty insurance, tend to incur heavy losses. In
        2012 alone, Canadian insurers incurred over CAD1 billion (US$1 billion) in losses. For example, in July
        2012, a thunderstorm caused an insured loss of CAD185 million (US$184.9 million), while remnants of
        Hurricane Sandy in October 2012 caused an insured loss of CAD100 million (US$100 million). While the
        disasters have an adverse impact on insurers’ earnings, they generate significant business opportunities
        for reinsurers, as insurance providers are more likely to cede larger proportions of revenue in order to
        safeguard their financial positions in times of financial crisis.
        Presence of large multinationals makes the segment competitive
        The Canadian reinsurance segment is dominated by large global reinsurance groups which operate in
        the country through branches or subsidiaries. Foreign operators such as Munich Re, Swiss Re, Scor SE,
        Hannover Re and Lloyd‘s have significant exposure to the Canadian reinsurance market. Munich Re and
        Swiss Re dominate the life and health reinsurance categories, while Swiss Re, Munich Re, Hannover Re
        and Scor SE control the property and casualty reinsurance categories. The presence of large
        multinational reinsurers increases the segment’s competitiveness, as reinsurance providers adopted
        strategies to gain market share in the low-profit-margin market.
        Repeal of regulations
        The repeal of Reinsurance (Canadian Companies) Regulations and Reinsurance (Foreign Companies)
        Regulations by the Office of the Superintendent of Financial Institutions (OFSI) will provide insurers with
        greater flexibility when structuring operations, and allow them compete globally. Repealing the
        regulations also ensures that the OSFI is more capable of addressing financial institution risks through
        guidance and supervisory tools. The change will alleviate the administrative burden on insurance
        companies, and allow for clearer contractual agreements.




Reinsurance in Canada, Key Trends and Opportunities to 2017                                                        Page 2

© Timetric. This product is licensed and is not to be photocopied                                 Published: December 2013
 TABLE OF CONTENTS




TABLE OF CONTENTS

1      Executive Summary........................................................................................................ 2
2      Introduction ..................................................................................................................... 7
    2.1 What is this Report About? ........................................................................................................ 7
    2.2 Definitions.................................................................................................................................. 7
    2.3 Methodology .............................................................................................................................. 9
3      Canadian Insurance Industry Attractiveness ............................................................. 11
    3.1 Insurance Industry Size, 2008–2017 ........................................................................................ 12
4      Reinsurance Growth Dynamics and Challenges ....................................................... 16
    4.1 Reinsurance Segment Size, 2008–2017 .................................................................................. 17
    4.2 Reinsurance Segment Size by Type of Insurance, 2008–2017 ................................................ 21
5      Key Industry Trends and Drivers ................................................................................ 30
    5.1 Fundamental Business Drivers ................................................................................................ 30
    5.2 Life Insurance Segment Drivers ............................................................................................... 31
    5.3 Non-Life Insurance Segment Drivers ....................................................................................... 32
    5.4 Personal Accident and Health Insurance Segment Drivers ...................................................... 33
6      Competitive Landscape and Strategic Insights ......................................................... 34
    6.1 Overview ................................................................................................................................. 34
    6.2 Leading Companies in the Canadian Reinsurance Segment ................................................... 35
    6.3 Munich Reinsurance Company of Canada – Company Overview ............................................ 36
        6.3.1     Munich Reinsurance Company of Canada – key facts .................................................................... 36
        6.3.2     Munich Reinsurance Company of Canada – key financials ............................................................. 36
    6.4 Swiss Reinsurance Company Ltd – Company Overview ......................................................... 37
        6.4.1     Swiss Reinsurance Company Ltd – key facts .................................................................................. 37
        6.4.2     Swiss Reinsurance Company Ltd – key financials ........................................................................... 37
    6.5 RGA Life Reinsurance Company of Canada – Company Overview ......................................... 38
        6.5.1     RGA Life Reinsurance Company of Canada – key facts ................................................................. 38
        6.5.2     RGA Life Reinsurance Company of Canada – key financials .......................................................... 38
7      Business Environment and Country Risk .................................................................. 39
    7.1 Business Confidence ............................................................................................................... 39
        7.1.1     Market capitalization trend – Canadian Stock Exchange, Canada .................................................. 39
    7.2 Economic Performance ........................................................................................................... 40
        7.2.1     GDP at constant prices (US$) .......................................................................................................... 40
        7.2.2     GDP per capita at constant prices (US$) ......................................................................................... 41
        7.2.3     GDP at current prices (US$) ............................................................................................................ 42
        7.2.4     GDP per capita at current prices (US$) ........................................................................................... 43
        7.2.5     GDP by key segments ...................................................................................................................... 44
        7.2.6     Agriculture, hunting, forestry and fishing net output at current prices (US$) ................................... 45
        7.2.7     Agriculture, hunting, forestry and fishing net output at current prices as a percentage of GDP ...... 46



Reinsurance in Canada, Key Trends and Opportunities to 2017                                                                                                   Page 3

© Timetric. This product is licensed and is not to be photocopied                                                                      Published: December 2013
 TABLE OF CONTENTS




        7.2.8      Manufacturing net output at current prices (US$) ............................................................................ 47
        7.2.9      Manufacturing net output at current prices as a percentage of GDP ............................................... 48
        7.2.10 Mining, manufacturing and utilities at current prices (US$) ............................................................. 49
        7.2.11 Mining, manufacturing and utilities at current prices as a percentage of GDP ................................ 50
        7.2.12 Construction net output at current prices (US$) ............................................................................... 51
        7.2.13 Construction net output at current prices as a percentage of GDP ................................................. 52
        7.2.14 Inflation rate ...................................................................................................................................... 53
        7.2.15 Exports as a percentage of GDP...................................................................................................... 54
        7.2.16 Imports as a percentage of GDP ...................................................................................................... 55
        7.2.17 Exports growth.................................................................................................................................. 56
        7.2.18 Imports growth ..................................................................................................................
								
To top