Coronavirus: GDP Contraction Will Affect Canadian P&C Insurance Premiums Growth in 2020
Given the relative maturity of the P&C insurance market in Canada there is a direct relationship between economic activity and premium levels. Based on DBRS Morningstar's latest moderate macroeconomic scenario for Canada in 2020, we expect that the growth of P&C insurance premiums in Canada will be severely limited and could even turn negative. Alternatively, under an adverse scenario, we anticipate that the volume of P&C insurance premiums will drop in 2020. Both scenarios contrast with strong premiums growth in the last three years. However, we expect a moderate to healthy improvement in premiums during 2021 and 2022 under both scenarios as economies around the world recover from the impact of the Coronavirus Disease (COVID-19) pandemic lockdown.
Fairfax Financial Holdings is a financial services holding company. Through its subsidiaries, Co. is engaged in property and casualty insurance and reinsurance and investment management. Co.'s insurance and reinsurance companies operate on a decentralized basis, with autonomous management teams applying a focused underwriting strategy to their markets. Co.'s investments are centrally managed for all the Co.'s group of companies by Hamblin Watsa Investment Counsel Ltd. Co. operates four main operating segments: Insurance, Reinsurance, Reinsurance and Insurance - Other, and Runoff.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
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