June 18, 2009 Insurance Organization

Montréal – The Autorité des marchés financiers (AMF) has released the 2008 report on insurance, tabled today in the Québec National Assembly by Minister of Finance Raymond Bachand. The report notes two major findings: Personal and damage insurance companies posted an overall drop in profitability, and the market share of Québec-chartered insurers reached 50% in 2008.

Lower profits for personal insurance and damage insurance companies
Net earnings posted by personal insurance companies fell to $5.5 billion in 2008, a 42.9% drop over the previous year. As for damage insurance companies, net earnings were $2.5 billion in 2008, a 51.3% drop compared with 2007.

Trends among personal insurance companies in 2008

• Written premiums in insurance of persons in Québec were up 5.8% to $10.9 billion in 2008, compared with $10.3 billion in 2007.
• Written premiums in accident and health insurance were up 3.3% to $5.1 billion in 2008.
• Written premiums in life insurance were up 2.5% to $4.1 billion in 2008.
• Annuity contributions increased by 24% to $1.7 billion in 2008.
• Benefits and dividends paid by insurers to Québec policyholders were up by 3.9% due to:
  • a 6.5% increase in accident and health insurance;
  • a 3.4% growth in life insurance;
  • a 0.1% variation in annuities.
• The average amount of coverage per individual insurance contract rose to $92,933 in 2008, compared with $88,645 in 2007.
• The average amount of coverage per group insurance contract rose to $35,874 in 2008, compared with $24,026 in 2007.
• Net assets in segregated funds fell 11.8% to $341.6 billion on a consolidated basis in 2008.

The volume of life insurance sold in Québec reached $711.3 billion in 2008, consisting of $416 billion for individual insurance contracts and $295.3 billion for group insurance contracts.

Trends among damage insurance companies in 2008

• Written premiums in damage insurance were up 1.5% to $7.4 billion in 2008.
• Automobile and property insurance premiums combined grew by 2.1% in 2008, to $3.1 billion and $3 billion respectively.
• Premiums for liability and other classes of insurance dropped 1.1% in 2008 to $872 million and $525 million respectively.
• Loss experience declined 82%, while investment income was down 34.2% in 2008 compared with 2007.
• Claims paid to policyholders in Québec were up 18.8% to $4.7 billion in 2008.

Increased market share for Québec-chartered insurers
The report notes that the market share for Québec-chartered insurers (personal insurance and damage insurance) reached 50% in 2008, compared with 48.7% in 2007.

The market trends observed in 2008 with respect to Québec-chartered insurers for personal and damage insurance include:

• A larger market share for Québec-chartered insurers in insurance of persons, which nudged up from 48.9% in 2007 to 50% in 2008.
• A jump in market share for annuities from 52.9% in 2007 to 60.3% in 2008.
• A decline in market share for accident and health insurance, which fell from 56.4% in 2007 to 55.9% in 2008.
• Growth of market share for Québec-chartered damage insurance companies, which rose from 48.5% in 2007 to 52.6% in 2008.
  • Results in this sector were primarily driven by property insurance and automobile insurance, where market shares stood at 51.6% and 61.1% respectively.
• The market shares held by the principal Québec-chartered personal insurance companies in 2008 are broken down as follows:
  • 17.9% of the market held by Desjardins Financial Security Life Insurance Company;
  • 13.2% by Industrial Alliance, Insurance and Financial Services; and
  • 8.5% by SSQ, Life Insurance Company.
• The market shares held by the principal Québec-chartered damage insurance companies in 2008 are broken down as follows:
  • Desjardins General Insurance, which held 9.4% of the market;
  • Axa Assurances, with 9%;
  • Promutuel Group, with 6.8%;
  • La Capitale General Insurance, with 5.6%; and
  • L’Union Canadienne, Compagnie d’assurances, 3.3%.

As at December 31, 2008, 303 insurers were licensed to operate in Québec, namely, 115 in personal insurance, 183 in damage insurance and 5 in personal and damage insurance.

The 2008 annual report on insurance is available (in French only) on the AMF website, under the heading Publications/Documents regarding the AMF/AMF annual reports.

The Autorité des marchés financiers is the regulatory and oversight body for Québec's financial sector.

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