Canada's Stock P&C Insurers Report Positive Results Despite Natural Catastrophe Losses

DBRS Morningstar released a commentary titled “Canada's Stock P&C Insurers Report Positive Results Despite Natural Catastrophe Losses,” which discusses the Q2 2023 results of Canada’s four publicly traded property and casualty (P&C) insurance companies.

The commentary highlights the following:

-- Q2 2023 results reflect the favourable insurance pricing environment. Despite the impact of catastrophe losses, Intact Financial Corporation, Fairfax Financial Holdings, Definity Financial Corporation, and Trisura Group Ltd (the Companies) reported underwriting profits for the quarter, with good combined ratios overall.

-- The Companies have taken proactive steps to capture yield in the current higher interest rate environment. Overall investment income was good, driven in part by higher reinvestment yields and dividend income.

-- The Companies remain well-capitalized with regulatory capital ratios of their Canadian operations well above regulatory and internal targets as at June 30, 2023.

“Despite a wildfire season that has been more active than usual and the occurrence of other severe weather events across Canada, the four Canadian publicly traded P&C insurance companies reported positive net earnings for the second quarter of 2023 and for H1 2023,” said Victor Adesanya, Vice President, Insurance. “We expect premium rates to continue increasing in the short to medium term especially for property insurance as claims are being pressured by inflation, higher reinsurance costs, and elevated catastrophic insured losses. The Companies remain well-capitalized with regulatory capital positions well above supervisory targets.”