“What this event will indicate at year end is that it was actually an earnings event for the Canadian domestic P/C industry,” said
Canadian life writers continued to wrestle with the industrywide issues brought by the ongoing low interest rate environment, but they remain well-capitalized and are maintaining pricing discipline, according to the report. Earnings were relatively strong in 2015, attributable to solid underwriting fundamentals and management actions to reduce interest rate risks, including increases to existing hedge programs. As volatility in commodity markets such as oil and gas, the weakening of the Canadian dollar and the Bank of Canada’s reduction in the overnight rate have led to economic challenges for
Many have remained conservative with their capital strategies until the full impacts of regulatory changes become clearer, according to the report. Canada’s Office of the Superintendent
“We don’t expect the model to really change the capital adequacy for the whole industry,” said
Overall operating earnings for the (life) industry remain strong, as underwriting performance has been generally favorable, despite some pockets of poor performance for certain blocks such as disability income.
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