A new market report by Research and Markets, entitled ‘Reinsurance in Canada, Key Trends and Opportunities to 2017’ has found that Canadian reinsurance providers have recorded negative premium growth.
This is 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 $30.7 billion in 2008 to $26.2 billion in 2012, at a compound annual growth rate of -5.5 percent between 2008 and 2012.
The report finds that the retention of risk among Canadian insurance providers was high.
The reinsurance regulations in Canada, which stated that insurance companies cannot cede more than 75 percent of their gross premiums in total and 25 percent of their gross premiums to unregistered reinsurers, was repealed by theThe Office of the Superintendent of Financial Institutions (OSFI) during the review period.
The authors of the report believe that this has provided insurers with the flexibility to structure operations and compete globally.
The Canadian reinsurance segment is expected to register positive growth at a compound annual growth rate (CAGR) of 1 percent over the forecast period; however it will be limited by the low interest rate environment and weak economic development.
