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Tag: Economy
OLDWICK, N.J.–(BUSINESS WIRE)–Canada’s property/casualty insurance industry thus far has fared better than their life counterparts amid the volatile economic and market dynamics created by the COVID-19 pandemic, according to a AM Best report.
In its Best’s Market Segment Report, titled, “COVID-19 Taking Its Toll on Canada’s Economy and Insurance Industry,” AM Best states that the country’s overall insurance industry remains well-capitalized. However, for Canada’s life insurance industry, top-line growth has been materially affected, as consumers reacted to COVID-19-fueled economic strain, and agents and life insurance representatives transitioned with varying degrees of success to a digital sales environment. Life insurers’ operating earnings also have been impacted because of the market dynamics and asset valuations, and earnings likely will be pressured by the prolonged volatility in the equity markets and low interest rates, leading to lower fee-based revenue as well. In April, AM Best revised its outlook on Canada’s life insurance industry to negative, owing to the significant disruption to the financial markets caused by the COVID-19 outbreak. AM Best remains concerned about companies with higher exposures to commercial mortgage loans, particularly in the hotel and retail segments, as well as office space, given that many companies have been cautious in returning to an office environment.
Canada’s property/casualty companies continue to show that they have the ability to remain profitable and meet the challenges presented by COVID-19, on top of those presented by increasingly volatile weather and climate conditions, fire and seismic activity, as well as economic volatility and competitive and regulatory issues. The personal auto insurance line remains a soft spot, however, as performance deteriorated again in 2019, and experienced a 10-point rise in the loss and loss adjustment expense ratio, reversing two years of improvement. All auto lines remain exposed to loss frequency brought on by factors such as distracted driving and more miles driven. In addition, inflation and a continual increase in loss severity due to rising repair costs are still affecting the auto lines. Early indications are that frequency trends will be down significantly in 2020, as shelter-in-place requirements, business closures, and remote working arrangements have caused a steep decline in miles driven across the country. AM Best maintains a stable outlook on Canada’s property/casualty segment.
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=300880.
A video presentation on this market segment report with AM Best Financial Analyst Brian Lynch and Senior Financial Analyst Anthony McSwieney is available at http://www.ambest.com/v.asp?v=ambcanada920.
AM Best will present its annual Insurance Market Briefing – Canada as two complimentary webinars on Sept. 9-10, 2020. “AM Best’s Canadian Outlook: In the Shadow of COVID-19,” will be held on Sept. 9, from 2-3 p.m. (EDT), and “Canada 2020 Hot Topics Panel Discussion,” will be held on Sept. 10, from 2-3 p.m. (EDT). For more information and for registration, please go to http://www.ambest.com/conferences/imbcanada2020.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Contacts
Raymond Thomson, CPCU, ARe, ARM, AIAF
Director—P/C
+1 908 439 2200, ext. 5621
raymond.thomson@ambest.com
Anthony McSwieney
Senior Financial Analyst—L/H
+1 908 439 2200, ext. 5715
anthony.mcswieney@ambest.com
Ann Modica
Associate Director, Credit Rating Criteria,
Research and Analytics
+1 908 439 2200, ext. 5209
ann.modica@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best’s Insurance Market Briefing – Canada will take place as two complimentary webinars on Sept. 9 and 10, 2020.
“AM Best’s Canadian Outlook: In the Shadow of COVID-19,” will be held on Sept. 9, from 2:00 p.m. to 3:00 p.m. (EDT). AM Best analysts will review the impact of COVID-19 on the Canadian insurance market and economy, including regulatory and monetary policies, the AM Best stress test results, innovation and other key issues and trends.
Panelists include:
- Michael Adams, associate director, life/annuity, AM Best;
- Ann Modica, associate director, economic & industry research, AM Best; and
- Raymond Thomson, director, composite ratings, AM Best.
Register now at www.ambest.devs/webinars/can120.
“Canada 2020 Hot Topics Panel Discussion,” will be held on Sept. 10, from 2:00 p.m. to 3:00 p.m. (EDT). AM Best analysts and market experts will examine significant industry issues, including the impact of COVID-19, latest innovation trends and regulatory/accounting issues that will influence the Canadian insurance market.
Panelists include:
- Sridhar Manyem, director, industry research, AM Best;
- Gordon McLean, senior financial analyst, property/casualty, AM Best;
- David Sloan, chief executive officer, Canada reinsurance solutions, AON; and.
- Ron Stokes, partner, Ernst & Young.
Register now at www.ambest.com/webinars/can220.
Attendees can submit advance questions during registration or by emailing webinars@ambest.com. Playback will be available to registered viewers shortly after the event.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Contacts
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Junto Resseguros S.A. (Junto Re) and Junto Seguros S.A. (Junto Seg) (collectively referred to as Junto). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Brazil.
The ratings reflect Junto’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Junto Re is classified as a local reinsurer in Brazil and mainly operates as a captive reinsurer for Junto Seg, an organization that has been writing surety directly for more than two decades. Junto Seg is the market-facing company of the group and one of the leading surety writers in Brazil. Junto benefits operationally from its minority shareholder, Travelers Brazil Acquisition LLC (with a 49.5% ownership), which is ultimately owned by The Travelers Companies, Inc. These benefits include collaboration on ERM, employee development, retrocession placement, claims handling, business development and other operational functions. Junto maintains low underwriting leverage and strong liquidity metrics, with a comprehensive retrocession program that provides additional capacity and reduces the company’s overall exposure.
Partially offsetting these positive rating factors is Junto’s concentration risk as essentially a monoline surety writer with business concentration in a single country. Junto’s future plans to mitigate this risk include expansion into related lines of business. Junto also executed a capital reduction and increased dividend payments to reduce the level of its surplus and optimize its capital structure. This did not result in a significant decrease in risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as the company’s net premiums written were significantly lower in 2019. Going forward, if net premiums resume growth, the risk-adjusted capitalization could be affected negatively if there is not a corresponding increase in capital.
Additionally, Brazil’s (re)insurance market continues to be highly competitive, with homegrown and global (re)insurers vying for market share. With Brazil’s economy showing a meaningful downturn caused by the COVID-19 pandemic, companies continue to seek international expansion while keeping an eye on opportunities in the (re)insurance market. Surety has been one of the fastest-growing segments in the (re)insurance industry in Brazil.
Positive rating triggers include a successful long-term execution of the group’s growth and diversification strategy and consistent operating performance, along with sustained and robust risk-adjusted capitalization. Negative rating triggers include a deterioration in either operating results or risk-adjusted capitalization, the inability to execute its growth and diversification strategy, a continued weakness in Brazil’s economy or a downgrade in Brazil’s country risk tier.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Contacts
Guilherme Monteiro Simoes
Senior Financial Analyst
+1 908 439 2200, ext. 5301
guy.simoes@ambest.com
Scott Mangan
Associate Director
+1 908 439 2200, ext. 5593
scott.mangan@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com