APRIL 02, 2020 02:44 PM (EDT)
Best’s Market Segment Report: AM Best Revises Canada Life/Annuity Outlook to Negative
|Anthony McSwieney |
Senior Financial Analyst
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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 02, 2020 02:44 PM (EDT)
AM Best has revised its market segment outlook on Canada’s life insurance industry to negative, owing to the significant disruption to the financial markets caused by the outbreak of COVID-19. Concurrently, AM Best is maintaining its stable outlook on Canada’s property/casualty industry.
In its Best’s Market Segment Report on Canada’s life insurance market outlook, AM Best states that although most of Canada’s life/annuity insurers maintain strong balance sheets and likely will be able to absorb regulatory capital changes resulting from volatility in the global financial markets, their near-term operating performance will be affected negatively.
The following factors led to the revised outlook:
The change in outlook does not necessarily correlate to an increase in negative rating actions by AM Best; rather, it anticipates headwinds to the operating performance metrics of Canada’s insurers. Over the past decade, Canadian companies have stress-tested multiple pandemic scenarios using better data and modeling techniques, which has placed them in solid positions to manage this risk, and they are generally well-prepared to quantify the impact in their financial metrics.
The stable outlook on Canada’s property/casualty industry is being maintained based on the segment’s solid risk-adjusted capital and increasingly sophisticated underwriting and distribution capabilities and enterprise risk management practices. AM Best will continue to monitor its market segment outlooks on major insurance industry segments and individual lines of business, and make updates or revisions related to the COVID-19 outbreak as warranted. To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp .
To access the full copy of the Canada life insurance market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=295956 .
The market segment report for Canada’s property/casualty insurance market outlook can be accessed at http://www3.ambest.com/bestweek/purchase.asp?record_code=295954 .
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.