 An Examination of Property & Casualty Insurer Solvency in CanadaAnne E. Kleffner and Ryan B. Lee Journal of Insurance Issues, 2009, vol. 32, issue 1, 52-77 Abstract: This paper provides both a qualitative and empirical analysis of insolvency experience in the Canadian property and casualty insurance industry. First, we provide a qualitative analysis of the differences between Canada and the U.S. that may help to explain the lower incidence of insolvency experience in Canada. These include differences in regulation and monitoring, such as the presence of a federal regulator and higher capital requirements, and differences in the environment, such as lower legal liability risk and less exposure to catastrophic risk. Second, we use logistic regression methodology and variables commonly used in U.S. studies of insurer insolvency prediction to test whether such models are able to predict insolvency for Canadian insurers. We include variables that attempt to capture some of the important differences between the Canadian and U.S. markets. The results suggest that only the profitability measure, return on assets, is found to be a statistically significant predictor of insolvency, and that result holds only one year prior to insolvency. This relationship is consistent with many previous studies on U.S. property and casualty insurer insolvency. Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wri:journl:v:32:y:2009:i:1:p:52-77 Access Statistics for this article Journal of Insurance Issues is currently edited by James Barrese More articles in Journal of Insurance Issues from Western Risk and Insurance Association |
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