Poor Canadian economy hurting insurers

by Nicolas Heffernan04 Feb 2015
Insurance companies are starting to feel the strain of the downturn in the Canadian economy, according to one international insurer.

“The quarter was highlighted by excellent results in our core U.S. Traditional business. Our Global Financial Solutions (GFS) and international lines of business, aside from Canada, sustained their recent strong momentum and favorable bottom-line results,” said Greig Woodring, president and chief executive officer of Reinsurance Group of America.

The company’s Canadian operations reported pre-tax operating income of $19.9 million this quarter, down from $47.2 million in the prior-year period.

Higher-than-expected large individual mortality claims, those exceeding $1 million, hampered results throughout 2014, including during the fourth quarter.

Additionally, a relatively weaker Canadian dollar adversely affected pre-tax operating income by approximately $1.9 million for the quarter, and $7.8 million for the year.

Reported net premiums increased modestly over the prior-year quarter and totaled $245.0 million.

In Canadian dollars, premiums rose nine per cent.     

For the full year, net premiums increased one per cent in reported U.S. dollars and nine percent in Canadian dollars.

Fourth-quarter pre-tax net income totaled $21.6 million compared with $50.5 million in the fourth quarter of 2013.