Financial Performance and Risk Management Overview
26
12-MONTH INDUSTRY OUTLOOK
Personal Auto
We expect the frequency of claims to normalize
toward pre-pandemic levels as people continue
to return to on-site work environments.
We also expect the inflationary pressures
affecting vehicle damage claims to remain
elevated.
With some early indicators of improving supply
chain in production and a slight decline in used
car prices, we expect to see severity continue
to level off or slightly decline in the coming
quarters.
Both frequency and severity trends as well as
elevated theft levels are expected to continue
to drive firming industry pricing and a focus on
disciplined underwriting.
T
Mong
Personal Property
Due to the volatility of weather events
combined with the ongoing inflationary
pressure on building materials and labour,
claim costs are expected to increase and
should be reflected in firm premium pricing
over the next 12 months.
We expect this volatility to continue, with
commensurate rate actions, coverage and
appetite changes, and an enhanced focus on
loss prevention and mitigation.
We expect the reinsurance market to remain
firm throughout the remainder of the year,
putting greater emphasis on primary insurers
to manage catastrophe exposures in the
higher catastrophe risk regions of the country.
000
OOO
Commercial Insurance
The expectations for an economic slowdown
have increased, with inflation being more
persistent than anticipated and continued
volatility in financial markets. This will likely
impact industry growth somewhat in the near
term.
We expect the commercial lines market to
remain firm through 2023 as carriers focus
on ensuring long-term profitability and
sustainable availability of capacity. We
expect the hard pricing environment to be
influenced by inflation trends, weather
events, expected investment returns, and
the industry's overall underwriting
performance.
Elevated reinsurance costs are expected to
prolong firm commercial lines market
conditions and pricing.
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