Slower Growth for Canadian Industry: Report
Current scale means that industry could feel the next financial crisis.
September 2, 2010
Despite a favourable outlook for the economy, the Canadian insurance sector’s maturity and competitive state will make it “unlikely to achieve rapid growth through our forecast period,” according to the Canada Insurance Market Report Q4, issued by Companies and Markets. The industry’s current scale, while positive, also holds some degree of risk, the analysts say, noting that ”the Canadian insurers are now so large in a global context that it would be difficult for them to emerge unscathed from any new financial crisis.”
The industry will also see dimmed interest from foreign countries, the report states, adding that “many of the deals that have taken place in recent years have involved sales of Canadian operations by foreign groups who have decided that those businesses are not central to their overall strategies.”
On the non-life side, a “fragmented” market and “lingering mutualization” mean that P&C insurers also “have had less desire and need than the life companies to seek challenges and opportunities in other countries.”
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