| Mike's Comments |
Apr 19, 2010Staying in Touch: You can read the latest issue of our 'Staying in Touch' newsletter. Each time we do these, it seems like the world has changed dramatically in only the space of a few months. Some topics mentioned in this newsletter have also been touched on in the 'Mike's Comments' section of our website including distracted driving (Cell-phone driving ban now in effect!) and water damage. As always, the newsletters are available in pdf format on our website going back several years. Often, issues mentioned years ago are still very much relevant today. In my last note, I mentioned how some level of perspective has been gained on the financial meltdown and noted how our domestic Insurance market had fared reasonably well. The financial results for the Canadian Insurance (Property & Casualty, i.e., not Life Insurance) are now available from MSA research www.msaresearch.com and while there was some improvement from 2008 (return on equity improved from 5.79% to 7.06%) there is massive volatility in results, and while 7.06% is better than a loss, investors in Insurance Companies are generally looking for returns in the 12% - 15% area to compensate for the risk. While some companies made solid profits, others faced staggering losses (one company in excess of $200 million). It is obvious this cannot continue and this is reflected in higher rates, particularly for personal auto coverage and personal property. As a key indicator, Kanetix reported that for the first quarter of 2010, the rates quoted for automobile insurance were up over 11% from the first quarter of 2009. The pain is being felt everywhere, but at the end of the day, no company can be expected to operate at a loss indefinitely. New initiatives aimed at reforming Ontario Automobile Insurance, along with better enforcement of the requirement to carry insurance (see my comments on the website regarding the problem of uninsured drivers) should help calm things down for 2011 - 2012. We have been working hard for our customers and are very pleased to announce that we now have Hagerty Insurance available for collector cars. This adds more options for our customers and our recent addition of Dominion of Canada and Chieftain Insurance gives us even more choice for both our personal and business clients. With our group of companies and our connections with wholesale and specialty companies, we can provide coverage for just about anything. Is there something more we can do for you? Once again, I want to thank our customers, some of whom have been with us for over 40 years. We will continue to do our best to help our clients find the right coverage for the risks they face every day. Michael Stuart, BBA, FCIP, CRM, CAIB Grant, Jones & Stuart Insurance Brokers Phone: 905-470-2732 ext 225 Toll Free: 1-800-445-2270 Fax: 905-470-2762 |