Key Findings from the PACICC Global Failed Insurer Catalogue
Moderator: Moshe Arye Milevsky, Professor of Finance, CIT Chair in Financial Service, York University//Schulich School of Business
The CEO of Canada’s Property and Casualty Insurance Compensation Corporation (PACICC), Alister Campbell, will present the Third Edition of the organization’s Global Failed Insurer Catalogue. More than 20 years have passed since a property and casualty (P&C) insurer failed in Canada – back in 2003 – and so it can be very tempting to conclude that insurer failures are a thing of the past. This research project provides compelling evidence of the continuing risk of insurer failure – in both developing as well as developed economies. PACICC believes that this Catalogue is now the world’s most comprehensive, publicly available database of failed insurers.
Key findings include:
965 insurers have failed in 71 different countries (119 jurisdictions) worldwide since 2000 ‒ 606 P&C insurers; 324 Life insurers; 22 Composite insurers (selling both P&C and Life policies) and 13 Reinsurers
On average, 38 insurers fail each year around the globe ‒ 24 P&C, 13 Life and one Composite
It is normal for individual jurisdictions to have long periods with no insurer insolvencies
More than half (65.7 percent) of all insurer failures around the world occur as part of a “cluster” ‒ defined as three or more failures within three years
A majority of policyholders outside of North America were not protected by a policyholder protection mechanism when their insurance company failed ‒ clear evidence of a serious protection gap in global policyholder protection.
Alister Campbell will also discuss growing solvency risk related to sequential catastrophic events.
PACICC is the industry-funded, non-profit resolution authority for Canada’s P&C insurance industry. PACICC’s mission is to protect eligible policyholders from undue financial loss in the event that a Member Insurer becomes insolvent.