A.M. Best Delivers Good Prognosis For Canada’s P&C Sector

Despite the tumultuous state of the financial markets worldwide, Canada’s property and casualty sector is poised to weather instability.

That was the welcomed message at A.M. Best’s Review and Preview Canada conference hosted in Toronto  last week .

“We believe that the industry is well capitalized to withstand the many challenges in the underwriting and investment markets today,” Charles Huber, a senior financial analyst at the rating company, said in summing up the sector.

While there will be reduced underwriting earnings, he added that sound fiscal decisions by investment managers will be critical in preserving stability.

A.M. Best released figures based on 220 companies that indicate a slight decline in net income over the past two years.

Huber attributes the decline to higher volumes of storm related claims, rising auto claims costs, lower capital gains and inflation, and suggests the combined factors will slow, but not hamper, the sector ‘ s profitability in the near future.

During the first two quarters of 2008, net income rings in at $1.2 billion, which is 37 per cent lower than last year.

In 2007, total net income was pegged at $4.6 billion, which is down three per cent from income in 2006.

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