The third quarter loss ratios for the private sector insurers were released by OSFI today. The Q3 loss ratios range from a high of 134% to a low of 11%. Export Development Canada (EDC) has not released their third quarter report yet but we are betting their loss ratio is in excess of 100%. The global market leaders, Euler, Coface and Atradius report year to date loss ratios in Canada of 92%, 60% and 134% respectively. These three insurers account for almost 80% of the domestic credit insurance premium written in Canada. Their loss ratios suggest a negative profitability for 2021 for two of them, assuming they have a 35% operating ratio. The Office of the Superintendent of Bankruptcy recently released the August 2020 year to date statistics which indicate overall corporate insolvency filings in Canada are down 17.9% from August 2019 (although CCAA filings are up 121%). This suggests the Canadian government’s Covid relief plan is helping companies avoid bankruptcy, but it also makes one wonder, how many Canadian corporate insolvencies are being pushed down the road? Given the reduction in Canadian insolvencies, the loss ratios posted by the insurers suggest they are feeling the pain from export claims. 2021 may skew the loss ratios for domestic losses and the EDC TPI program may be required even more to bridge domestic coverage gaps. One thing is for certain -underwriters do pay claims! We can help navigate your credit insurance needs during these turbulent times, please reach out to us.