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The North America Insurance Sectors : A Company and Industry Analysis (June 2006)
Mergent, June 2006, Pages: 28
This report updates the previous North American insurance report, focusing on the markets in Canada and the United States
Current Environment - Key Points
- US property and casualty insurers raised property insurance premiums believing the class now attracts greater risk as a result of extreme weather conditions; the reinsurance sector also raised premiums for property and casualty insurers
- The US life and health sector enjoyed growth as a result of higher sales of investment products
- The US insurance industry reported record insured losses of US$58 billion in 2005, a 15-fold increase over a period of 30 years, mainly resulting from the devastating impacts of Hurricanes Katrina, Rita and Wilma
- The Canadian insurance industry reported record profits of more than C$6 billion (US$5.45 billion) in 2005, up 50% from 2004
This caused a stir among consumers wanting to know how the industry managed to record such results despite being plagued by catastrophe losses
- Canadian banks and insurance stocks slid by 0.3% on April 4, 2006, as expectations of higher interest rates undercut the nation's financial sector
Industry Profile - Key Points
- Last year, US Congress extended for another two years the new Terrorism Risk Insurance Revision Act of 2005, which establishes a shared responsibility for insured commercial property and liability losses from acts of terrorism
- Two US Senators proposed a bill to overhaul US insurance regulations, which are currently complex, with primary responsibility assigned to individual state insurance departments
The bill proposed a single supervisory body to regulate the insurance industry, given that the current insurance markets have become centralized
- Auto insurance premium rates have been on the downswing throughout the Canadian auto market, as insurers strive to find a balance between affordable premiums for all drivers and sufficient benefits for those who make a claim
- A change to the Canadian Pension Plan (CPP) scheme earlier this year is set to bring greater revenues for the private insurance sector
Market Trends and Outlook - Key Points
- The number of US insurance failures continues to fall as a result of the country's overall economic strength
- The gap in health insurance coverage has grown even wider among US families due to financial constraints, with more than 40% of working Americans earning between US$20,000 and US$40,000 uninsured
- US life insurers are eagerly tapping the insurance market for the elderly as baby boomers become more affluent; they now control more than 77% of US wealth
- The issue of bancassurance has invoked much criticism among Canadians, reflecting their serious concerns regarding the issue of privacy
Canadians do not favor having much of their information held by a single bank
- Canadians are reconsidering the use of hybrid cars that combine gasoline and electric power, as they are cheaper to insure compared with conventional gas powered vehicles
- The reappearance of harder market conditions is expected to lead to consolidation in the industry, with smaller insurers surrendering their business to bigger and established players
Customers who bought this item also bought
United States Insurance Industry - Global Strategic Business Report
Non-Life/ Property & Casualty Insurance Industry - Global Strategic Business Report
Insurance Industry - Global Outlook
European Insurance Industry - Global Strategic Business Report
Catastrophe Insurance Industry - Global Strategic Business Report
Analysis of the U.S. Property and Casualty Insurance Market
Life, Pension, Health & Disability Insurance Industry - Global Strategic Business Report
Reinsurance Industry - Global Strategic Business Report
Canadian Insurance Industry - Global Strategic Business Report
Automotive & Vehicle Insurance Industry - Global Strategic Business Report
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