Of the billions of dollars worth of coverage that Canadians buy every year, most is either life and health insurance or property and casualty insurance. In 1993, Canada had about 900 insurance companies, of which 395 were federally registered and governed by the Insurance Companies Act. Canadians buy more life and health insurance on a per capita basis than any other group except the Japanese (the United States is third). Compulsory insurance for Canadians includes automobile insurance and workers' compensation, on which the government holds a monopoly. Manitoba, British Columbia, Quebec, and Saskatchewan also operate a monopoly on primary automobile policies.
Since 1978, the Canadian property and insurance market has continued to experience underwriting losses. The return on equity fell to 13.1% in 1997, to 6.8% in 1998, and to 5.4% in 1999. Since the industry continues to pay more in claims and expenses than it earns in premium revenue, overall profitability is ultimately determined by revenues generated from investment earnings. A high rate of natural disasters coupled with a low rate of crime in 1999 influenced industry intake. In 2000, government restructuring of the financial sector refused to allow bank branches to distribute insurance policies, supporting the insurance industry. In 2001, direct premiums written in Canada totaled US $45.312 billion, of which US $24.342 billion were nonlife insurance and US $20.97 billion were life insurance.