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Canada Insurance market PDF

1 Canada Insurance market

The official name is Canada. It is located in the middle part of North America. Area 9976140 km2. By the size of the territory – 2nd place in the world after the Russian Federation. The population of 32 million people., the capital-Ottawa.

Canada's GDP at current prices reached 1228.9 billion canadian dollars in 2003. ($927 billion) Per capita – about 28,9 thousand dollars. USA.

1.1 state of the canadian insurance market

The history of the canadian insurance market dates back to 1804. There are currently approximately 348 companies in Canada. Of these, the insurance company is engaged in 117 life insurance (52 canadian / 65 international); property insurance-205 (94 canadian / 111 international) and 26 different insurance companies.

The first canadian insurance company Nova Scotia Fire Insurance Association was founded in 1809 in Halifax. In 1819, this company established the Halifax Fire Assurance Company. In 1833, the British American Assurance Company was founded in Toronto.

The most successful canadian insurance company of the late nineteenth century was the Western Assurance Company. It had offices and agencies in all States of the United States, as well as a branch in London, India, that is, the company was represented in 22 countries. Currently continues its activities as part of the group of companies Royal Insurance Canada Group.

In 2000, income from investment activities of insurance companies improved. The average return on investment was 9.5 %, up 2.2 % from 1999.

Despite the positive aspects, many experts note that the underwriting results were noticeably "tarnished". Thus, the ratio of the collected premium to the acquisition costs and paid losses in 2000 was 108.3 % (underwriting loss), which is worse than the results of 1999 and a record 1998 (the year of the ice storm in Quebec) years. Individual insurance industries in different provinces also showed negative growth. The negative results of auto insurance in Ontario, Alberta and British Columbia were particularly noted.

And so the net profit in the insurance industry in 2000 amounted to 1.055 billion canadian dollars, which is worse than the record in 1997 with a result of 1.96 billion canadian dollars. The total net premium collection was about 26.5 billion canadian dollars, with the interesting fact that foreign insurers collected almost half of this premium.

ING Canada continues to lead the list of the largest insurance companies with a net premium of almost 2 billion canadian dollars. It is followed by CGU Group Canada Ltd. and the Co – operators Group. In General, the share of the first 150 insurance companies accounts for more than 80 % of the collected insurance premium and more than 90 % of the paid losses.

1.2 Government regulation of the insurance company of Canada

Supervision of insurance activities at the Federal level is carried out by the Department of financial institutions control of the Ministry of Finance of Canada. In December 1991, a new law on Federal insurance companies was adopted, according to which the activities of foreign companies were defined. The financial institutions control Department is responsible for regulating the activities of foreign companies, as well as for issuing licenses.

Federal law deals only with the control and management of company funds. But, despite all the measures taken, cases of bankruptcy of insurance companies are still noted over the past few years.

1.3 Main types of insurance in Canada

Insurance in Canada is divided into 3 main categories:

– social insurance;

- life insurance against accidents and medical expenses;

- General types of insurance (property and liability insurance).

Social insurance is provided by the state, which is the insurer, while all citizens are policyholders. Hospitalization and medical plans, job loss insurance, industrial accident insurance are the most typical examples of the types of insurance that fall into this category. These types of insurance have evolved over the years and in their present form provide basic protection in the event of insured events. Additional types of insurance, higher limits and broad terms of insurance can be purchased from private insurance companies specializing in this market segment.

Life insurance, accident and medical expenses, disability insurance are provided by private insurance companies specializing in these types of insurance or implementing them in addition to other types of insurance.

The General types of insurance (property and liability insurance) include all other types of insurance that do not fall into the first two categories. The most common are car and civil liability insurance, property and business interruption insurance, machinery and electronic /electrical equipment damage insurance, liability insurance, marine and aviation cargo insurance for the duration of transportation, personal property insurance, as well as insurance of all kinds of obligations and risks associated with the dishonesty of the company's personnel, theft and fraud. In recent years, insurance of risks associated with e – Commerce, bio-engineering, as well as many other types of risks, sometimes quite exotic, but insurance, which is necessary for the successful functioning of the enterprise in today's market.

1.4 canadian Insurance intermediaries and their role in promoting insurance products

In Canada, there are no restrictions on the sale of insurance products directly by the policyholder, insurance companies widely use the services of insurance brokers and agents in their activities.

Intermediaries perform a number of functions that facilitate the operation and promotion of insurance company products. Nevertheless, representing insurance companies, brokers primarily protect the property interests of policyholders and bear full responsibility for their recommendations in choosing an insurance company and in case of improper performance of its obligations to customers. Brokers and agents can be represented as independent companies and individuals, as well as organizations that sell products only to one insurance company and are completely dependent on it.

There is a fairly strict regulation of mediation at the Federal and provincial levels. Regulatory issues include: certification and issuance of certificates and licenses, as well as their extension and re-certification, examinations. The state controls the financial activities of intermediary organizations and ensures the proper execution of contracts concluded through their mediation in order to prevent fraud, unfair competition and errors and omissions that may entail serious financial consequences.

The organizational structure and management of the Agency / brokerage firm varies depending on the specialization, the type of services provided, the presence of a network of offices at the provincial and Federal levels, and much more.

Despite the presence in Canada of most of the largest international brokerage companies, local brokers make them serious competition for complex high-tech and international projects. Rich experience, traditions passed from generation to generation, understanding of the needs of policyholders help in the difficult competition.


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