According to some Canadian media, auto insurance rates in Ontario are increasing by as much as 11 per cent this year. They say that the Financial Services Regulatory Authority of Ontario has “given the green light to increases in automobile insurance premiums for some 20 insurance companies in the province, with some insurers approved to increases rates by just over 11 per cent and others by around 10 per cent”. However, Insurance Bureau of Canada ensures that “only one insurance company received approval”.
Every year Ontario drivers pay a lot for auto insurance and the fact is that the province has one of the lowest accident and death rates in the country. Milénio Stadium knows that the average cost of auto insurance in the province is among the most expensive in the country. Actually Ontario has the second-highest average cost of auto insurance ringing in at $1,505. The highest average is in British Columbia – $1,832- and the lowest insurance costs belong to Quebec – $717.
Beyond this, Ontario Trial Lawyers Association claims that Ontario drivers overpaid billions of dollars in premiums and are subsidizing lower insurance rates for the rest of Canada. Milénio Stadium spoke with Insurance Bureau of Canada and Pete Karageorgos, director, consumer & industry relations, secures that some of the latest news are not true.
Milénio Stadium: Why is auto insurance going to increase 11% in Ontario? But according Financial Services Authority of Ontario the increase in auto premiums is only for 20 insurance companies in the province. Can you please comment?
Insurance Bureau of Canada: Only one insurance company received approval rate increase just over 11%. That company represents a very small market share, specifically 1.12% of the entire Ontario drivers. For all insurers the rate adjustment is just 1.56%.
Ontario’s auto insurance providers are focused on working with the provincial Government to reduce premiums in a responsible way while ensuring drivers have the coverage they need and want.
In fact, auto insurance earned premiums across Ontario for the five years (2014 to 2018) have only increased by 6.8%, while claims costs have risen 22.1% over the same five years.
MS: A new report from Ontario Trial Lawyers Association claims that Ontario drivers overpaid billions of dollars in premiums and are subsidizing lower insurance rates for the rest of Canada.
IBC: Insurance Bureau of Canada rejects the false Lazar report. This is not the first time personal injury lawyers have paid Dr. Fred Lazar, a professor at York University, to try to thwart progress being made to improve Ontario’s auto insurance system. As recently as 2019, Lazar was paid to prepare a report on insurance revenues for a campaign by trial lawyers in Newfoundland and Labrador, where the provincial insurance regulator later excluded its findings. A number of actuaries criticized Lazar’s 2018 report for cherry-picking data to perpetuate personal injury lawyer’s false narrative around profits.
Insurance Bureau of Canada (IBC) and its members remain focused on improving the auto insurance system for all consumers in Ontario.
MS: Fraud costs Ontario drivers alone over a billion dollars every year. IBC and CANATICS will combine efforts from now on, how will this work in practice?
IBC: Insurance fraud is a billion-dollar societal problem that leads to higher premiums, wasted resources and the victimization of consumers. Bottom line: when they cheat, you pay. Addressing fraud is critical issue the industry is addressing.
As insurance crime becomes increasingly sophisticated, our industry’s approach to detecting, deterring and disrupting fraud must evolve. Today, responsibility for fraud resides with many different groups, making coordination and collaboration difficult. After extensive discussion, the industry found that providing anti-fraud services through a single entity would be the most effective way to manage and deliver them.
The changing insurance landscape warrants a dedicated effort for fighting P&C insurance fraud. A single entity, devoted to leading our industry’s anti-fraud strategy will ensure improved collaboration and coordination of the industry’s efforts to detect, suppress, and deter fraud.
IBC and CANATICS continue to work together to create this new single entity.