P&C sector to see weather-driven premium surge in 2024 – DBRS Morningstar
P&C sector to see weather-driven premium surge in 2024 – DBRS Morningstar | Insurance Business Canada
Insurance News
P&C sector to see weather-driven premium surge in 2024 – DBRS Morningstar
Credit rating agency highlights factors pointing to rate hikes
Insurance News
By
Mika Pangilinan
Canada’s property and casualty (P&C) sector is poised to continue benefiting from favourable pricing conditions that will foster top-line growth as severe weather events ramp up demand for coverage, according to DBRS Morningstar.
A new commentary published by the credit rating agency identified several factors supporting premium rate increases in 2024, including elevated reinsurance prices, inflation volatility, hard market dynamics, and the growing severity of weather events.
The country’s encounter with intensified and more frequent natural catastrophes took a particularly harsh toll on insurers during the third quarter of the year.
However, raising premiums “may prove to be more and more difficult to executive over time,” she said.
In the face of these insurability, affordability, and solvency concerns, DBRS Morningstar suggested reducing risk exposures through adaptation and resiliency measures.
“In the absence of such a reduction, and in light of growing climate-related risks, we may have an insurance availability problem that carries broader negative economic and credit assessment implications,” the report stated further.
It also noted that improved investment income could reduce the magnitude of premium rate increases but added that this would not be enough to fully offset them.
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