Alberta’s Automobile Insurance Rate Board supports telematics as ‘voluntary discount’ program

Before carriers can roll out telematics-based auto insurance in Alberta, the issue of “informed consent” from consumers will need to be addressed, the province’s Automobile Insurance Rate Board suggested in its recent annual report.

“A number of insurers and other stakeholders have approached the Board about introducing their version of (usage-based insurance) to Alberta,” AIRB stated in the annual report for 2013, released March 27.

“The Board is supportive of UBI as a voluntary discount program. However, entry into the Alberta market will require the approval of the Superintendent of Insurance as this product introduces new rating factors. The issue of informed consent by Alberta consumers must be satisfactorily addressed prior to the introduction of any programs.”

AIRB added the data gleaned from telematics – such as mileage, speed, time of day and incidents of hard braking – are “highly predictive of risk.” The ability of insurers to monitor driving behaviour “can work to reduce claim costs by providing incentive to modify driving behaviour,” AIRB says, adding the board is “supportive of UBI as a voluntary discount program.”

AIRB also noted in its report that 71 auto insurance companies “were active in Alberta in 2012, a decrease of four insurers over 2011.” The board reported that the private passenger loss ratio in Alberta for 2012 was 77%, compared to 71% in 2011.

The AIRB annual report also includes market share figures some corporate groups. Intact had the greatest (21%) market share, followed by Wawanesa with 14%, TD with 13%, The Co-operators with 8%, Aviva with 7%, RSA with 6%, the Alberta Motor Association with 6%, Economical with 4%, State Farm with 3% and Northridge with 2%. The others had a combined total market share of 16%.