At the same time, a Marsh outlook report predicts possible rate increases in the third or fourth quarter.
According to a new outlook report issued by Marsh, the Canadian insurance market should continue to remain stable throughout 2013, though the second half of the year may bring about some modest increases in the rates.
Overall, the industry in Canada performed better than other markets last year, said the report.
This data was provided in the Marsh document called the Canada Insurance Market Report 2013, which offered a breakdown of the insurance market in a number of different sectors. Within its forward, the CEO and president of Marsh Canada, Alan Garner, said that “We expect these favourable market conditions to continue into 2013.” He went on to add that “However, depending on insurer financial results for 2012, we could see upward pressure on rates in the second half of the year.”
Marsh also identified an insurance market trend that suggested that the rates typically remained flat in 2012’s last half.
The company expects that this will continue for the majority of this year. It did state that there may be some rate firming within the areas of the country with a greater exposure to catastrophe, such as Quebec and British Columbia. Those have an increased risk of experiencing an earthquake.
The report also went on to say that the considerable competition among the brokers and the insurers of the Canadian insurance market, within the small and midsize enterprise (SME) sector also helped to improve the stability. Also contributing were the property and casualty loss ratios in Canada, which have softened the marketplace, it said.
It pointed out that while Hurricane Sandy did have some impact in Canada, it is the claims that will be made from insurers doing business in the New York area that will have the most considerable impact in terms of catastrophe losses. In this light, it also suggested that the insurance market in the country may be looking into the overall approach that is taken to flood retention levels, especially in the areas that have been shown to have greater exposure.