In addition to life insurance companies, there are a large number of companies in Canada that offer P&C insurance. Whereas life insurance covers risks associated with human mortality and morbidity, P&C insurance is focused on risks that result in loss to property and possessions. Some examples of this include:
- Auto insurance, which covers losses to individuals and property due to accidents and other unforeseen events
- Home insurance, which covers damages to residences and property resulting from severe weather, fire, theft, and other perils; as well as liability to third parties from the action of the insured
- Commercial insurance, which covers similar risks as home insurance, and may also include coverages such as business interruption insurance
- Marine insurance, which covers losses to shipping vehicles
- Professional liability insurance, which covers losses to a professional’s clients arising from errors or omissions.
There are numerous other insurance types provided by a P&C company.
Most P&C insurance is annually renewable, so actuaries practising in this area measure risks over a relatively short time horizon, in contrast to life insurance actuaries who must assess exposures lasting several years into the future. However, in P&C insurance, the amount of the claim will not be known, sometimes for several years, as may be the case with liability insurance. Again, this is in contrast to life insurance, where the amount of insurance (and benefits) is often defined contractually. As a result, P&C actuarial training is very specific. The vast majority of P&C actuaries have written exams offered through the Casualty Actuarial Society, which specializes in topics related to P&C insurance.
The actuarial functions within a P&C company mirror those of a life insurance company. Actuaries are heavily involved in the ratemaking function, which is analogous to product pricing in the life insurance industry. Actuaries also play prominent roles in the reserving and financial reporting functions.
Approximately 10 percent of the CIA’s members are employed in the P&C practice area.